How to get a student loan without a credit check

Many people borrowing to pay for college don't have perfect credit. In fact, many young students have no credit score or credit history at all.  

The good news is, you can still borrow for school even if you don’t have a strong credit record. There are excellent federal student loan options for college students that don't require a credit check, which are always the first and best resource for any borrower. Undergraduate and graduate students received nearly $241 billion in federal student aid for the 2022-23 school year, according to College Board.

Unfortunately, if federal student loans don't provide enough funding, finding private lenders that don't perform a credit check is more difficult. There are still options, but you'll need to shop around carefully or work with a cosigner. This guide can help. 

Apply for federal student loans first

Federal student loans, issued by the U.S. Department of Education, are the best types of student loans for most borrowers. There are many differences between federal vs. private student loans that give federal loans a significant advantage.

One big benefit is that most federal student loans do not require a credit check. Both Direct Subsidized and Unsubsidized Loans are available regardless of credit. You'll need to complete the Free Application for Federal Student Aid (FAFSA) and provide basic financial information to become eligible, but your credit score is not a factor. 

There is one exception to this. Parent PLUS loans and grad PLUS loans do require a credit check, and those with adverse credit won't qualify (with rare exceptions). However, the definition of adverse credit is very specific and includes problems like delinquencies on large loan balances, defaults, debt discharges, tax liens, wage garnishment, foreclosure, and repossession. Simply having a short credit history or a low score isn't disqualifying unless you meet the definition of adverse credit.

Federal student loans also have many other benefits and protections beyond the fact that your credit doesn't impact eligibility or the interest rate you’re charged. With federal loans, you can become eligible for Public Service Loan Forgiveness, and there are income-driven repayment options that set your monthly payments at a percentage of income and qualify for loan forgiveness after a certain number of on-time payments. 

Find private student loans with no credit check

While federal student loans are readily available without a credit check, this is not the case with private student loans. Almost all private student loan lenders not only check your credit but also have a minimum score requirement. 

However, there are a limited number of private student loan lenders that do have more relaxed rules when it comes to credit qualification requirements. These lenders include:

• Ascent: Ascent offers outcomes-based student loans to juniors and seniors who do not qualify for a credit-based non-cosigned loan. Eligibility depends on many factors, including your school, program, graduation date, and GPA. 
• Funding U: Funding U reviews your credit to identify issues such as missed payments, but there is no credit score minimum to qualify for a loan. Loans are merit-based and the lender assesses academics and career paths before determining whether to provide funding.
• MPOWER: MPOWER offers loans to international students who do not have a cosigner, with eligibility based on future earnings. These loans help you to build a U.S.-based credit history. 

With these lenders, even when a credit check is required, the outcome of your application is not determined based solely on your credit report or score.

Many lenders who consider credit an important factor will also allow you to prequalify and shop for rates and terms without a hard credit check that places an inquiry on your credit report. This means you can determine if you might be eligible without potentially damaging your score, as too many inquiries can hurt your credit score.

How to qualify for student loans with bad credit or no credit

If you have bad credit or no credit, you still have some options to qualify for private student loans. These tips can help. 

Apply with a cosigner

Virtually all private student loan lenders allow you to apply with a cosigner. This is someone who guarantees the loan and promises to pay if you don't. The cosigner must meet the lender's income and credit requirements, and will share legal responsibility for the debt. 

Often, parents or older relatives will serve as a cosigner for a student. In some cases, lenders allow cosigner release after a certain number of on-time payments. This means loved ones can help students get approved, but share responsibility for the debt for only a short time, such as 12 or 24 months.

Improve your credit

Because it is difficult to apply for or refinance student loans with bad credit, it may be worth working to improve your credit history. There are a number of ways you can do that, including the following:

• Become an authorized user: If you ask a relative with a solid payment history to add you as a cosigner to a credit card, it will show up on your credit record and improve your score.
• Apply for a secured credit card and use it responsibly: Secured cards give you a credit line equal to a deposit you make, so virtually any adult can get approved for one. If you use them responsibly, you can develop a positive payment history and improve your credit score.
• Repay debt: If you are using more than 30% of your available credit, this can have an adverse impact on your credit utilization ratio, which is one of the most important factors in determining your FICO score. Paying down what you owe can help your score improve.

Find a lender with low credit requirements 

Some lenders have much more relaxed rules regarding credit requirements. Research your options to find out if you're eligible to borrow with these lenders. Be sure to check rates and terms, though, and confirm the loans they are offering will be affordable after graduation. 

How student loans can impact your credit

When you apply for a private student loan, the lender will typically conduct a hard credit check, or inquiry. Inquiries remain on your report for up to two years, and too many can hurt your credit score. Taking out a student loan can also shorten the average age of your credit history, as this is a new debt. This can have a short-term adverse impact. 

However, in the long run, student loans will improve your credit score if you use them responsibly. Diversity in types of credit is one factor in the scoring formula, and a student loan is an installment loan, so it may be a new type of credit if you've only used credit cards in the past.

If you pay your student loan bills on time, you will also develop a positive payment history that will help you build credit. This is the most important factor for credit scoring models. Alternatively, if you pay late or are delinquent or go into default on your debt, this can severely damage your credit score. 

FAQ

Can you get a student loan without a credit score?

You can get federal student loans without a credit score. Direct Subsidized and Unsubsidized Loans are available regardless of your credit. While parent and grad PLUS loans aren't available to those with adverse credit, simply not having a score won't impact eligibility.

It's more difficult to get private student loans with no credit score, unless you have a cosigner with good credit. However, there are some lenders that take into account other factors, such as academic programs and grades. These lenders may allow you to borrow even without a credit history if you meet their eligibility requirements.

Are interest rates higher for borrowers with bad credit?

In general, borrowers with poor credit will pay higher interest rates for private student loans. However, this is not the case with federal student loans. All borrowers who obtain federal student loans will pay the same interest rate regardless of their credit history. The rate is determined based on the type of loan and the academic year when you borrowed.

What's the easiest student loan to get?

Federal student loans can be much easier to qualify for than other types of loans. As long as you meet basic requirements, such as attending a qualifying academic program, you may be eligible for Direct Subsidized and Unsubsidized Loans. PLUS loans are also available, as long as you don't have adverse credit.

You will need to complete the FAFSA in order to qualify. Direct Subsidized Loans require you to demonstrate financial need, but Direct Unsubsidized Loans don't.

Does Sallie Mae do a credit check?

Sallie Mae does perform a credit check. If you are not able to qualify based on your own credit history, Sallie Mae accepts cosigners and has some of the easiest requirements for cosigner release of any lender.

What is the minimum credit score for a student loan?

There is no minimum credit score for federal student loans. For private student loans, minimum scores vary by lender, but generally borrowers will need a FICO score of at least 670 with most private student loan providers.

Will Sallie Mae approve me without a cosigner?

Whether Sallie Mae will approve you without a cosigner depends on your income and credit history. The lender indicates that most undergraduate students do need a cosigner to apply because they are unable to qualify based on their own financial credentials.