NASHVILLE, Tenn. (WTVF) — Federal student loan payments are set to resume at the end of the month.
During the COVID-19 pandemic, federal student loan payments were frozen.
Experts said if you don’t have a plan in place to start repaying them it could ruin your credit score.
About 30 million people with student debt saw their credit scores improve during the pandemic, according to a report from the Federal Reserve Bank of New York.
The Biden administration has yet to make a final decision about whether to cancel student debt for nearly 40 million Americans and missing payments or defaulting on your student loan can have far-reaching financial consequences.
A single late payment can pull your score down drastically. Experts said it could tarnish an otherwise strong credit score, reducing it by up to 100 points.
On the other hand, if your payment history has already been inconsistent, then a missed payment or two will have less of an impact.
Experts add, that carrying debt is harmless to your creditworthiness as long as you make your payments on time and do not default on the loan.
They say they worst thing to do is to ignore those payments and get a plan in place on how to start paying them back.
