Does a student loan affect your credit score?

Quick answer: Student loans from the Student Loans Company are different from other kinds of loans and credit in the UK. They don’t affect your credit score or appear on your credit report, and repayments are based on your income.

In the UK, having a student loan won’t affect your credit rating. This is because your student loan doesn’t appear on your credit report, meaning lenders can’t see it when they do a credit check. But lenders may ask about your student loan if you apply for a mortgage. Other types of student debt — like student overdrafts — can affect your credit score.

Want to learn more? Our guide breaks down how student finance affects your credit score, why your score is important and how to look after it while you’re studying.

Please note, this guide is intended for people who have studied in the UK and does not cover student loans for international students.

Do student loans affect credit scores?

No, UK student loans don’t affect your credit score. This is because they work differently to personal loans and secured loans. Student loans are borrowed from a public sector organisation called the Student Loans Company (SLC), and repayments are normally taken directly from your wages.

The exception to this is private student loans, which impact credit scores in the same way as personal loans. Private student loans carry risk and should be avoided, where possible. This is because they often have high interest rates, and repayments are not based on income, unlike loans from the Student Loans Company. This means you would have to start paying them back straight away, even if you don’t have a job once you graduate.

A student loan from the Student Loans Company should always be your first choice. If you need additional financial support beyond your student loan, talk to your university about the support they offer, and consider alternatives, like part-time work or student overdrafts.

Does applying for a student loan hurt my credit?

No, your application for a UK student loan through student finance won’t appear on your credit report or affect your credit score. This is true even if you’re refused a student loan or you apply for more than one.

Does missing a student loan payment hurt my credit score?

No, your UK student loan payments have no impact on your credit score. It’s very unlikely that you would miss a student loan payment as they come directly out of your wages (or go hand-in-hand with your tax payment if you’re self-employed). Generally, the only time you might need to pay the Student Loans Company directly is if you’re living overseas.

Student loan repayments are based on your income. If your income changes, your student loan repayment amount will automatically change to match this. If you lose your income or it drops below a certain threshold, your student loan repayments will pause until your income goes back above the threshold. This means that you won’t miss a payment, even if your circumstances change.

Will paying off my student loan improve my credit score?

No, paying off your student loan won’t improve your credit score in the UK. There’s no penalty fee for paying back your student loan faster — but it’s usually not worth it if your loan is likely to be written off. You can check when your loan will be written off. It also makes sense to prioritise paying off higher-interest debts first, such as credit cards or bank loans.

Why student loans aren’t like other types of credit

Here are several ways a student loan is different from most other credit in the UK:

• You’ll borrow from a public sector lender — The Student Loans Company (SLC) is a non-profit organisation owned by the UK government.
• There’s no impact on your score — A student loan from the SLC doesn’t appear on your credit report or affect your credit rating.
• Repayment is delayed — You won’t start paying back your student loan until the April after you leave your full-time course.
• Payments are based on your income — Repayments are a percentage of your income over the minimum earning threshold
• Your loan is written off after a set period — Your balance is cleared after 25–30 years or when you turn 65, depending on your repayment plan.
• The debt won’t outlive you — Your student loan is cancelled if you die. With other types of debt, the amount you owe is often taken out of what you leave behind for others to inherit.

It’s important to note that the above is only true for student loans from the Student Loans Company. Private student loans from other lenders are like other types of credit, such as personal loans, and will impact your credit score in the same way.

What other student debt should I be aware of?

Besides your student loan, a common type of student finance is a student overdraft. By letting you use more money than you have in your bank account, it can help you budget more flexibly.

Student overdrafts often have 0% interest until at least a year after you graduate. But they aren’t free money. You must pay back what you borrow — ideally before your bank starts charging interest.

Always arrange an overdraft before going into one, or you could see penalty fees and hurt your credit score.

Does a student overdraft affect your credit score?

Yes. Unlike your student loan, a student overdraft will appear on your report and can affect your credit score in several ways:

• When you apply — Applying for an overdraft will leave a hard search on your credit report, which can cause your score to dip slightly. It should go up again if you look after it. Try not to make lots of applications in one go though, as that has a bigger impact on your score.
• If you go into your student overdraft — Getting closer to your credit limit can lower your score. Only use your overdraft when you really need to, and pay it down as soon as you can.
• If you manage your overdraft well — If you only dip into your overdraft occasionally and clear it by the end of the month, it’s unlikely to hurt your score. In fact, a well-managed overdraft may improve your score over time.

It’s always worth understanding what affects your credit score before you apply for credit.

Credit Score Specialist

What our expert says

Student loans don’t affect your credit score — but overdrafts, utility bills and phone contracts can. Build good habits early, like paying lenders on time and only borrowing what you can afford. This should make it easier to get credit in the future, whether that’s car finance, a mobile contract, or your first mortgage. Jacqui Hamilton, Experian UK

What credit scoring means for students

Your credit score is a snapshot of how you’ve handled credit in the past. Your score starts when you begin building a credit history, such as by opening a bank account or getting a mobile phone contract.

A good credit score means you’re more likely to get:

• Approved by lenders
• Larger borrowing amounts
• Lower interest rates
• Cards with rewards like cashback or air miles
• Cheaper insurance premiums
• Rental agreements
• Employment, or business finance

It’s free to check your credit score with Experian. Your score updates every 30 days if you log in, or every day with Experian CreditExpert. Viewing your score won’t hurt it, so check as often as you like!

Improving your credit score as a student

Improving your credit score can help you get approved for things like credit cards, phone contracts and car finance. Here are some tips on how to build your credit score as a student.

Pay bills on time

If you have bills in your name — like electricity, gas, water or a phone contract — paying on time and in full can improve your score over time. Late payments will lower your score.

Be wary of financial associations

A financial association links someone else’s credit report with yours. It happens when you share a joint financial account or get a joint county court judgment. Avoid financial associations you don’t want, especially if they could hurt your score. You can see who you’re connected to by checking the ‘financial associations’ section of your Experian Credit Report.

Build your credit history

Never used credit before? Lenders might not have enough information to judge the risk of lending to you, which can make getting approved harder. One way to build your credit history is by getting a credit builder card and paying it off each month. Pay it off in full each month, or you’ll get charged interest. Try and avoid maxing out your card as this can hurt your score rather than help it.

Register to vote

Registering to vote at your current address can improve your score. This is because it helps lenders check your personal details when you apply for credit. Make sure the address on your credit application and credit report match the one you put on the electoral roll.

Connect to Experian Boost

See if you can give your score an instant lift with Experian Boost. Experian Boost shares information with lenders about your everyday payments for things like Netflix, Spotify or Amazon Prime. Not all lenders use Experian Boost, and not all scores go up, but connecting won’t hurt your score.

Student credit score FAQs

Do student loans show up on a credit report?

No, UK student loans from the Student Loans Company don’t appear on your credit report. This means lenders can’t see your student loan when they do a credit check. However, they may ask if you have a student loan when you apply for credit — especially a large loan or mortgage.

Does student debt affect your credit score?

Yes, it can. Student loans don’t affect your score in the UK, unless they are private student loans. But student debt is a wider term that can include other types of credit, such as student overdrafts. Overdrafts appear on your credit report meaning they can affect your score.

Does having a student loan affect you getting a mortgage?

Yes, it can. Lenders won’t see your student loan when they do a credit check, but they may ask about it when you apply for a mortgage. This is because mortgage lenders are required to do strict checks to make sure you can afford to repay them.

Does a student loan count as debt?

Yes, a student loan is debt — you borrow a certain amount and make repayments that include interest. However, student loans from the Student Loans Company in the UK are different to other forms of debt. For example, your payments are based on your income, not the amount you borrowed, and come directly out of your wages. Also, student loans don’t appear on your credit report or affect your score.