What to do if your credit score is harmed by the restart of federal student loan collections

What to do if your credit score is harmed by the restart of federal student loan collections

There are many benefits that come with a good credit score: better rates on car and homeowners insurance, more housing options, and the ability to snag credit cards with the best rewards, just to name a few. But soon millions of student loan borrowers may have to say goodbye to some of those perks.

More than 9 million student loan borrowers will face "significant drops" in their credit scores once delinquencies appear on their credit reports in the first half of 2025, according to a recent report from the Federal Reserve Bank of New York. The delinquencies come as a result of the Education Department restarting collection efforts on federal student loans that are in default after having paused