The Weird Way Missing a Student Loan Payment Can Absolutely Destroy Your Credit
If you have student loans and have looked at your credit reports, you might’ve noticed there are multiple entries for your loans.
Credit.com explains that a late student loan payment can hurt your credit much more than you think. Why? Each disbursement of your student loan can be reported as a separate account, even if you just make a single payment each month. Even if you have a single federal loan for the year, it will usually be given to them in two or more disbursements. Multiply two or three disbursements over a four- or five-year period, and those accounts add up pretty quickly.
"That might not be a big deal while you’re in school, and as those accounts age, your credit scores will improve with timely payments. But what if you make a late payment on that one repayment you make each month? Yep, that multiplier effect can hurt you again, and pretty badly. Suddenly that one 30-day late payment shows up as 12 or 15 late payments. Two late payments? Ouch. Your credit scores have probably taken a beating."
WHY do we punish students with high rates and lunacy like this scenario?