MAINTAINING A POSITIVE FINANCIAL PROFILE

MAINTAINING A POSITIVE CREDIT PROFILE

CREDITWORTHINESS Most student loan programs require an independent credit review for student applicants. Guidelines generally parallel normal lending standards for the extension of personal credit. Factors considered include a history of timely credit repayment and consideration of sufficient resources to meet monthly repayment obligations upon graduation or other departure from school.

Boston University School of Medicine does not provide institutional assistance in lieu of non-institutional loans that have been denied because the student is in default or is not creditworthy.

CREDIT CRITERIA FOR PRIVATE LOAN PROGRAMS Lenders will generally make you a loan provided that your credit report meets the lender’s credit criteria. These are lender, not BUSM, criteria. To be approved for private educational loans, your credit report must show:

No more than one account currently rated 60 or more days delinquent at the time of the credit report.
No more than two accounts that have been 60 or more days delinquent in the past two years.
No account that has been delinquent 90 or more days in the past five years.
No record of a paid or unpaid collection or charged-off account in the past two years.
No record of foreclosure, repossession, open judgment or suit, unpaid prior educational loan default, or other negative public credit record items in the past six years.
No record of bankruptcy in the past seven years.
No more than three inquiries to an authorized credit reporting agency in the past six months.
Accounts listed as “Not Paid as Agreed” will be classified as 90 days delinquent.

REQUESTING A CREDIT REPORT You should request a credit report periodically to insure its accuracy. If problems exist, you should correct errors or make other arrangements with creditors before submitting loan applications to this office.

When requesting a credit report, send a written, signed memo including your full name, social security number, date of birth, daytime telephone number, current address, and any previous addresses for the past five years.

The following are companies frequently used by lenders of student loans:

Equifax Credit
Information Services, Inc.

Trans Union LLC Consumer Disclosure Center

Experian

P.O. Box 740241
Atlanta, GA 30374

P.O. Box 1000
Chester, PA 19022

P.O. Box 2002
Allen, TX 75013

1-800-685-1111

1-800-888-4213

1-888-397-3742

www.equifax.com

www.transunion.com

www.experian.com

RE-ESTABLISHING CREDIT To help a student with financial planning, the Office of Student Financial Services will provide students with advice about correcting credit problems. However, the student will have to work with creditors or lenders to clear up any credit problems or discrepancies. These parties cannot discuss the reasons for denial or other credit information with anyone but the applicant. Be aware that correcting your credit profile may take several weeks.

STUDENT LOAN DEFAULTS Default on an educational loan occurs when you fail to make payments during the required repayment period or you fail to provide proof that you are in an approved period of deferment. You can avoid default by making payments or by submitting deferment forms to your lender in a timely manner. If you are in repayment and experiencing cash-flow problems, contact your lender to ask for forbearance or a graduated repayment schedule. There are few loan programs that do not make accommodations for hardship or unemployment. However, some loan programs do not provide deferments or forbearance options.

OSFS may also provide advice on how to resolve defaulted student loans. A student who is in default must work directly with the guarantee agency. A student who has defaulted may re-establish eligibility for the Federal Direct/Stafford Loan program after making six consecutive monthly payments and will be considered “rehabilitated” after twelve consecutive monthly payments.

CONSEQUENCES OF DEFAULT You should be able to service your obligations adequately upon graduation. However, if you become 180 days delinquent on a loan obligation, you will be in default. Some of the consequences of defaulting on your student loans are the following:

Defaults are reported to credit bureaus as a delinquent education claim.
You may be disqualified from receiving consumer credit such as credit cards, car loans, and home mortgages.
You will be unable to obtain future educational loans and other federal financial aid from any institution. At this institution, if the default is discovered after aid has been awarded, the student has four weeks to resolve the default before aid is cancelled.
You will be ineligible for other types of government loans such as Small Business Administration (SBA) loans or federally subsidized mortgages.
Involuntary deductions will be made against your wages.
Federal and/or state income tax refunds will be withheld.
Your account may be assigned to an agency, which will impose collection costs, late charges, and attorney fees.