Student Loan Delinquencies: A Hidden Threat to Credit Scores—and Your Path to Homeownership

Student loan payments are officially back, but here’s a surprise many families don’t see coming: A large portion of borrowers still haven’t resumed making them. According to a recent Wall Street Journal article,

“About 43% of borrowers who owe payments on federal student loans haven’t resumed making them.”

The ripple effects of missed or late payments can be significant—especially for parents who co-signed for a child’s loan. One overlooked billing notice can trigger a major drop in credit score. As the WSJ further notes:

“People with higher credit scores could be hardest hit. Those with scores above 780 could see a 129-point drop on average if they had a serious delinquency.”

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Why This Matters for Future Homebuyers

A sudden dip in credit can quickly derail a home-purchase strategy. Mortgage rates, private mortgage insurance costs, and overall financing terms all hinge on strong credit. One delinquency—especially on a student loan—can translate to thousands of dollars in extra costs over the life of a mortgage.

Parents, take note: If you co-signed a student loan, your credit is just as much at risk as the primary borrower’s. Even a single missed payment can negatively impact your score.

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Step 1: Check Your Credit Report

Start by pulling your free annual credit report at annualcreditreport.com.

• Spot Errors Early: Make sure everything reported is accurate.
• Monitor Late Payments: Student loan delinquencies can appear if payments aren’t made or properly deferred.

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Step 2: Consider a Pre-Approval to Uncover Issues Early

Getting pre-approved for a mortgage with The Kristoff Team can highlight potential credit pitfalls before you’re under contract for a home.

• Resolve Delinquencies: Identify and correct any late-payment history—especially from student loans—before it stalls your buying timeline.
• Lock In Better Terms: A higher credit score can help secure better interest rates and lower monthly payments.

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Bottom Line

Student loan delinquencies aren’t just a “young borrower” issue. They can harm any co-signer’s credit—often, parents with otherwise excellent scores. The best defense is early awareness and proactive measures:

1. Check your credit at annualcreditreport.com.
2. Pre-approve with The Kristoff Team to minimize costly surprises when you’re ready to buy.

Need guidance on navigating student loans and homebuying? We’re here to help you map out a strategy. Reach out anytime at (843) 603-5924.

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Article references:
“Student Loan Repayment Pause Ends—What to Know About Resuming Payments.” The Wall Street Journal.