2008-2009 Financial Aid

Good Credit Information

When you apply for either a Federal Graduate Plus Loan or a private alternative loan, your lender will request a copy of your credit report and will evaluate your credit to determine your credit worthiness.

If the lender is evaluating your credit for the Federal Graduate Plus Loan, the lender will only be looking for adverse or negative credit; a credit score will not be used.  Adverse credit includes such items as:

• Any current delinquency of 90 days or more
• Default
• Bankruptcy
• Discharge
• Foreclosure
• Repossession
• Tax lien
• Wage garnishment
• Write-off of Title IV debt
• Open collection

If you are denied a Graduate Plus Loan you will have the option of correcting the adverse credit, appealing the decision if you feel there was an error on your report, or applying with an endorser.

If the lender is evaluating your credit for a private alternative loan, not only will they review your credit report but they will also look at your credit score.  Credit scoring is the process by which your credit is assigned a numerical score that identifies your level of future credit risk to the lender; in other words, your willingness to repay your loan.  Your score considers both positive and negative information in your credit report and is based on factors such as payment history, types of credit, and outstanding debt as well as the proportion of credit used as compared to available credit.  This information will be used to determine whether you will be approved for a private loan on your own signature, denied a loan or will be required to obtain a co-signer in order to be approved.

It is recommended that you be proactive and check your credit report on a regular basis to maintain control of your credit.  You should review your credit report at least once a year to check for possible errors and re-evaluate your “credit picture” for ways to improve your score.  It should be noted that the three major credit bureaus (listed below) each maintain their information independently so the information each bureau has on file for you may differ and the score they provide to the lender may differ.  For this reason, it is advisable to check your credit with all three of the major credit bureaus.  The Fair Credit Reporting Act now requires the three national credit reporting agencies to provide a free copy of your credit report once every 12 months.  This free copy of your credit report can be obtained at www.annualcreditreport.com.  If you have been denied credit, you are entitled to get a free copy of your credit report from the agency used in the credit decision within 60 days of the denial.

Equifax – 800-685-1111 – www.equifax.com
Experian – 888-397-3742 – www.experian.com
Trans Union – 800-888-4213 – www.transunion.com

For a more comprehensive explanation of credit scoring and maintaining and protecting your good credit, please refer to the following websites: www.myfico.com and the section called “Be a Wise Borrower” at www.accessgroup.org.

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