A Parent's Credit Report and PLUS Loans

The PLUS Loan can be provided to you, the parent, as a non-need based loan specifically because it is a credit-based loan, similar to a personal line of credit. As such, it's vital to know exactly where your credit stands.

What is credit?

Fundamentally, credit is a record of how timely you are in paying back money you have borrowed. Your credit is stored as a report and a score at a credit bureau. The Student Credit Card Center has put together a wealth of information of how to get credit, improve your credit, repair your credit, and apply for student credit cards.

For those of you who need information on where your credit is now, Click here to obtain your credit report and score!

Check Your Credit Report and Improve Your Credit Score

How is credit judged?

Credit scores are numerical indexes based on an algorithm developed by Fair Isaac Company, called a FICO score. Scores are negatively impacted by events such as late payment, incomplete or partial payments, defaults, and judgments or liens, and range from 300 to 900. The actual algorithm is a trade secret of Fair Isaac, but the following breakdown approximates the weighted values that compose your score.

• 35% Payment history
• 30% Outstanding debt
• 15% Length of your credit history
• 10% Recent inquiries on your credit report
• 10% Types of credit in use

The "average" credit score for "good" credit is 675 or better for most major lenders, such as mortgage lenders. Scores lower than 625 demand scrutiny, while scores lower than 600 will often be denied outright. For in depth articles and research on student credit, please visit the Student Credit Card Center.

What is the required credit score for the Parent PLUS Loan?

Eligibility for the PLUS Loan depends on a modest credit check that determines whether the parent as an adverse credit history. An adverse credit history is defined as being more than 90 days late on any debt or having any Title IV debt (including a debt due to grant overpayment) within the past five years subjected to default determination, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off.

To ensure that you can obtain a PLUS Loan for your child's education, it is essential to have a recent copy of your credit report.

As a service to Parent PLUS Loan customers, we offer you the ability to order your credit report and score online for a nominal fee, in partnership with the Fair Isaac Company.

Check Your Credit Report and Improve Your Credit Score