The one loan that gets thrown to the back of your mind and forgotten about – your student loan. Useful for the uni years, a subtext on your monthly repayment landscape forever more (or at least, it can sometimes feel like forever). 

But, in a plot twist when it comes to how consumer loans usually impact your credit score – positively if repaid in full and on time; negatively if payments are partial or late – the student loan behaves a little differently. 

With fixed repayments and comparatively low interest rates, the student loan is perhaps the most affordable credit you’re ever likely to get. The repayments are calculated in line with your earnings and the loan gets cancelled if you don’t complete repayments after 30 years (or 25 years if you went to uni before 2012) – which is unheard of when it comes to other borrowing.

Here are three key learnings when it comes to student loans and credit scores.

Your student loan doesn’t affect your credit score

Student loans in the UK differ from other borrowings in that they don’t appear on your credit file, therefore don’t affect your credit score. 

Your student loan will be considered by lenders

If and when you apply for a loan, mortgage or credit card, the lender is likely to take your student loan into consideration, alongside your credit score, when doing an affordability check.

As your student loan repayment is taken out of your salary each month, this means your take-home pay is slightly lower. Ergo, the monthly amount you could afford to repay on other loans – like a mortgage, for example – would need to be slightly lower, too. 

So, your student loan won’t stop you from getting a mortgage, it will just marginally influence the deal.

Your student loan can demonstrate your creditworthiness

Like any loan, your student loan can put a positive spin on your creditworthiness, providing you don’t default on your repayments. 

As student loan repayments are automatically taken out of your monthly salary (if you’re full-time employed), this takes the legwork out of remembering to repay. While, if you’re self-employed, your student loan repayments will be calculated when you complete your tax return and paid annually. 

The bottom line is, your student loan doesn’t impact your credit score and in the grand scheme of things, the repayments are so small that they shouldn’t affect your ability to get other loans in the future. Now, where did I put that graduation certificate...