I Don’t Want My Student Loans to Hurt My Credit Report

“Dear Steve,

I owe $17,000 on my student loans. I have been able to make the payments each month, but I just learned that I will be soon losing my job. I don’t have an emergency fund and I will not collect enough on unemployment to make the payments with my other expenses.

What is the best course of action if I want to be responsible regarding my loans and do little or no damage to my credit report while I search for new work that will allow me to make payments again?


Dear Jenn,

Please comment below and let me know if these are private or federal student loans. It makes a huge difference in what the advice will be.

But in general, if you have federal loans, get them on an income based repayment plan on your new unemployed income. See this guide for advice how to do that.

If they are private loans, see if you can get them deferred for a few months. The balance will grow like mad during that time but it will put the issue on hold for the moment.

On your credit report comment, that should be the last of your concerns. A credit report can be rehabilitated but a fear of credit report issues leads people to make really bad decisions.

The issue here is not even close to being a credit report concern. The underlying factor here is the loss of employment without a financial safety net.

Screw the credit report. Prioritize your expenses into required and and not required. Pay those first and focus on getting a new job.

A return to a paycheck will go a long way to making this all go away. And don’t waste a perfectly good teachable moment. When you get your new job, start saving.

Please post your responses and follow-up messages to me on this in the comments section below.


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Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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