Credit Tips: Do student loans affect approval of credit cards?

Posted On: February 23, 2005

Author: trey20
Joined: 28 Jan 2005
Posts: 7
Posted: Wed Feb 23, 2005 2:41 am
Post subject: Credit Decline

If you are declined credit due to excessive obligations in relation to income do student loans that are deffered count in that or just regular loans and credit cards?

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Author: NightStar
Board Monitor
Joined: 07 Nov 2003
Posts: 2580
Location: Illinois
Posted: Wed Feb 23, 2005 9:38 am

Should be just the other credit and not the student loans, though if the student loans are expected to come due during the loan you are applying for, then yes they may consider that.

Example would be you have a student loan that is not due for 5 years, then you apply for a 3 year installment loan, you would have paid off the loan before the student loans became due, so they should not worry about it in that case.

But if you where going for like a mortgage 30 year loan, then they would know in 5 years, them student loans would come due, and might by then create hardship… they may also allow for time, that other debt would be paid then freeing up extra income to cover the student loans.

They have some pretty complicated underwriting for figuring debt / income ratios.

Does not hurt to call them and ask, if the student loans figured into their determination on too much debt so you have an idea what and if you can fix the problem.

Also don’t forget you are entitled to a free copy of the credit reports they accessed for loan approval.

Experian 888-397-3742
Equifax 800-685-1111
TransUnion 800-916-8800

Best Regards,
Pammila Phillis
Board Monitor
U.S. Citizens for Fair Credit Card Terms, Inc.
http://www.cardratings.com
501-663-0314 PH
501-663-0033 FX

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