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Q: I need to take out a student loan next this year when before I leave for college. Do I need good credit to be approved for this loan?
A: For a federal student loan, you don’t. With Stafford and Perkins loans, your credit score won’t even be checked. Unfortunately, you can only take out so much money with a federal loan, and it won’t be enough to cover all your costs at the more expensive universities. If you reach the limit, you may need to take out a private student loan.
For private student loans, your credit score will almost always be checked. Each company has different requirements for qualifying, but you should have a credit score of at least 650 if you want a good chance of qualifying. While those with a credit score below 650 may still qualify, it can take several applications, and will ding your credit score a bit if there’s too large of a gap between the credit pulls.
If you have poor or no credit and are going to an expensive college that won’t be covered by Stafford or Perkins loans, you may need to look around for other ways of financing your education. There are many scholarships (http://www.fastweb.com) out there, for those with financial need, for minorities, for people who bowl, for people above a certain height…almost anything you could think of. You may have to put a bit of work into it, like writing a few essays, but it’s worth it. Scholarships are better than loans, anyway, since you don’t have to pay them back.