Grad Plus Loans and Credit Score Forum

[quetzal_bird]

I received my first financial aid packet a few days ago, and it lays out how much of my education can be covered with Federal Direct Grad PLUS loans, which require an application and non-negative credit history. I'm really not sure what my credit score is; I have never opened up a line of credit and I'm still in undergrad without any assets. I have overdrafts on my checking account from 1-2 years ago, and some utilities bills that I've paid late in the last year. I'm wary of checking my credit score because I know some checks can lower the score. But my question is, will my score really matter if I have a cosigner, which I assume I will need to have anyway?

[helloscriptkitti]

1.) You will not be penalized for checking your own credit. 2.) Bank overdrafts will not affect your credit score unless there were other adverse actions due to your overdraft and your account was closed. 3.) Utilities usually don't affect your credit score unless they were sent to collections

[quetzal_bird]

thanks for the quick response!

[geoduck]

Also, GradPlus is credit based, but not credit-score based. From gradloans.com

A qualified Graduate PLUS Loan borrower does not have an adverse credit history (defined in regulations as being 90 days or more delinquent on any debt, or having a credit report that shows default, discharge, foreclosure, repossession, tax lien, wage garnishment or write-off of a Title IV debt during the five years preceding the date of the credit report). Note that Graduate and Professional Student PLUS loans do not use any kind of a debt-to-income ratio or FICO® score, unlike private education loans.

So keep your nose clean for 90 days before filing. There ya go.

[quetzal_bird]

Also, GradPlus is credit based, but not credit-score based. From gradloans.com

A qualified Graduate PLUS Loan borrower does not have an adverse credit history (defined in regulations as being 90 days or more delinquent on any debt, or having a credit report that shows default, discharge, foreclosure, repossession, tax lien, wage garnishment or write-off of a Title IV debt during the five years preceding the date of the credit report). Note that Graduate and Professional Student PLUS loans do not use any kind of a debt-to-income ratio or FICO® score, unlike private education loans.

So keep your nose clean for 90 days before filing. There ya go.

thanks. I appreciate the clarification. I think I'm in the clear

[swc65]

Also, GradPlus is credit based, but not credit-score based. From gradloans.com

A qualified Graduate PLUS Loan borrower does not have an adverse credit history (defined in regulations as being 90 days or more delinquent on any debt, or having a credit report that shows default, discharge, foreclosure, repossession, tax lien, wage garnishment or write-off of a Title IV debt during the five years preceding the date of the credit report). Note that Graduate and Professional Student PLUS loans do not use any kind of a debt-to-income ratio or FICO® score, unlike private education loans.

So keep your nose clean for 90 days before filing. There ya go.

thanks. I appreciate the clarification. I think I'm in the clear

No they go back 5 years. The 90 days is if any one bill is CURRENTLY more than 90 days late. As in if the one bill is 60 days late then you're fine. They don't limit the inquiry to 90 days.

CHECK YOUR CREDIT.

some banks will convert overdraft to personal loans which will end up on your credit history. You need to check your credit today and take care of these things immediately. If they would affect your loan eligibility you would have to pay them off in time for the credit report to update and the gov to see that the items have cleared.

http://www.ifap.ed.gov/dlbulletins/atta ... Attach.pdf

[well-hello-there]

--LinkRemoved--

there's the REAL free credit report site set up by the three major credit bureaus as mandated by the federal government. If you want your fico score, however, you will have to pay a fee. Maybe $8.00 ?? It was a long time ago when I paid for my score through that site and so it's all a little hazy.

[quetzal_bird]

yeah, I just used that site and checked my credit history at all 3. I don't have anything negative on any of my reports, but did not check to see my score. thank you to everyone who commented. all of this was really helpful. I need to make sure to be more on top of all this going forward

[geoduck]

Also, GradPlus is credit based, but not credit-score based. From gradloans.com

A qualified Graduate PLUS Loan borrower does not have an adverse credit history (defined in regulations as being 90 days or more delinquent on any debt, or having a credit report that shows default, discharge, foreclosure, repossession, tax lien, wage garnishment or write-off of a Title IV debt during the five years preceding the date of the credit report). Note that Graduate and Professional Student PLUS loans do not use any kind of a debt-to-income ratio or FICO® score, unlike private education loans.

So keep your nose clean for 90 days before filing. There ya go.

thanks. I appreciate the clarification. I think I'm in the clear

No they go back 5 years. The 90 days is if any one bill is CURRENTLY more than 90 days late. As in if the one bill is 60 days late then you're fine. They don't limit the inquiry to 90 days.

CHECK YOUR CREDIT.

some banks will convert overdraft to personal loans which will end up on your credit history. You need to check your credit today and take care of these things immediately. If they would affect your loan eligibility you would have to pay them off in time for the credit report to update and the gov to see that the items have cleared.

http://www.ifap.ed.gov/dlbulletins/atta ... Attach.pdf

Did you read that link? They only go back to 5 years for default, bankruptcy, foreclosure, repossession, lien, garnishment or write off of Federal Student Aid. Regular negative credit elements such as history of delinquency, high revolving balance, numerous attempts to gain credit, low credit history and high number of revolving accounts don't apply. The sole exception is current debt over 90 days unpaid, which is why I suggested "keeping his nose clean" for 90 days. He would have known if any of the 5 year things happened... they don't tend to be surprises.

[molazapuku]

I have read through that link...and others...several times. I think the wording is very vague, and I can see your point that it could be read that the 5 year history only applies to student loans. However, other research (including example denial letters) makes me believe that ANY bankruptcy and wage garnishment and such go back 5 years as well as "write off of a Federal Student Aid debt".

So, as I read it, being 60 days behind on any account within the last 90 days will get you flagged...but so will having any wage garnishment, any bankruptcy, any foreclosure, or any write-off of a student loan in the last 5 years.

I hope you are right and I am wrong...as I will likely not qualify under my interpretation but certainly would under yours.

[geoduck]

I have read through that link...and others...several times. I think the wording is very vague, and I can see your point that it could be read that the 5 year history only applies to student loans. However, other research (including example denial letters) makes me believe that ANY bankruptcy and wage garnishment and such go back 5 years as well as "write off of a Federal Student Aid debt".

So, as I read it, being 60 days behind on any account within the last 90 days will get you flagged...but so will having any wage garnishment, any bankruptcy, any foreclosure, or any write-off of a student loan in the last 5 years.

I hope you are right and I am wrong...as I will likely not qualify under my interpretation but certainly would under yours.

I think you're confused... Your interpretation is the same as mine. Sounds like it's time to find a co-signer for you...

[molazapuku]

I am not confused...very confident my interpretation is correct and that I would likely have to have a cosigner (which is unfortunately something I will not be able to get). I expect to be denied...and I will appeal with some extenuating circumstances and see what happens. I can make it without the grad plus but things will be significantly harder.

I just wish the poster who said the 5 year time period applied only to student loans was right. 99% sure they are wrong...and I can see how one could read that and come away with that idea...so I am not exactly holding my breath here.

[geoduck]

I am not confused...very confident my interpretation is correct and that I would likely have to have a cosigner (which is unfortunately something I will not be able to get). I expect to be denied...and I will appeal with some extenuating circumstances and see what happens. I can make it without the grad plus but things will be significantly harder.

I just wish the poster who said the 5 year time period applied only to student loans was right. 99% sure they are wrong...and I can see how one could read that and come away with that idea...so I am not exactly holding my breath here.

Nobody said that the 5yr time period 'applied only to student loans'. That is what you are confused about. You are exactly right that you will need a cosigner if you have had any of the major negative credit events listed above.

[HOPEFORCHANGE]

You're all wrong. It is bankruptcy, forclosure, repossessions, liens, default on federal student loans, and currently 90 or more days delinquent on anything. Not delinquent in the past 90 days. Anyway, call the Department of Education and ask to speak to an application consultant. Alternatively, apply prior to admittance to a law school for GradPlus on studentloans.gov

NOTE: Many schools disable the function, so you may have to try several schools before one allows you to apply.

[geoduck]

You're all wrong. It is bankruptcy, forclosure, repossessions, liens, default on federal student loans, and currently 90 or more days delinquent on anything. Not delinquent in the past 90 days. Anyway, call the Department of Education and ask to speak to an application consultant. Alternatively, apply prior to admittance to a law school for GradPlus on studentloans.gov

NOTE: Many schools disable the function, so you may have to try several schools before one allows you to apply.

That's exactly what we have said/quoted from the document referenced about halfway down. I recommended that OP 'keep his nose clean for 90 days' so that he would pay any outstanding past due bills and keep from creating any new past due accounts. Thanks for reading, though.