Does Applying for Financial Aid With the FAFSA Affect Credit?

Does FAFSA Require a Credit Check?

Filling out the FAFSA does not include a credit check. Completing the FAFSA, therefore, won't result in a hard inquiry on your credit report or affect your credit scores in any way.

The form will request information about income earned from work, cash savings and investments belonging to the student, the student's spouse (if they're married) and their parents (if they're a dependent student). But your credit scores, payment history and debts aren't taken into account.

That's one of the main reasons federal student loans should be your first stop if you need student loans for college. While federal loans are available to prospective students without regard to creditworthiness, they still come with competitive, fixed interest rates lower than the typical student would receive for a private loan.

There's one notable exception: federal parent PLUS loans (and PLUS loans for graduate and professional students, which will be phased out as of July 1, 2026). Parent PLUS loans do require a credit check, which will show up as a hard inquiry on the credit report belonging to the parent applicants.

Private student and parent loans also require a credit check, which can cause a small, temporary dip in your scores. Lenders check your credit for these loans because your approval, interest rate and terms are based on your credit history. You will apply for private student loans directly through a bank, credit union or online lender, not via the FAFSA.

Learn more: What Are the Different Types of Student Loans?

How Can Federal Student Loans Affect Credit?

While applying for federal financial aid using the FAFSA won't have an impact on your credit, submitting an application for a federal PLUS loan and repaying all types of federal loans will. Read on for the positive and negative credit effects.

How Federal Student Loans Can Help Your Credit

• Build payment history: Most significantly, repaying student loans on time over several years will help you build positive payment history, which is the most important factor in your credit scores. Consistently making student loan payments on time will get you closer to good or excellent credit scores, which will afford you access to loans and credit cards at favorable terms in the future.
• Jump-start your credit file: For some borrowers, getting a federal student loan is their first foray into the credit landscape. You may find that a loan in your name establishes a credit file for you, which gives you the chance to build credit history from scratch.
• Improve your credit mix: If you are already an authorized user on a parent's credit card, getting an installment loan such as a student loan can help your credit. Credit mix, or the range of credit types in your file, accounts for 10% of your credit score. Creditors like to see that you can manage both credit cards and loans, and having each in your name can strengthen your score.

How Federal Student Loans Can Hurt Your Credit

• Higher total debt: Taking on any loans will increase your amounts owed, a category that makes up 30% of your credit score. More debt is often associated with lower credit scores, while paying down debt can strengthen your score. Also, the more debt you take on, the higher your debt-to-income ratio (DTI), or your total monthly debt payments compared with your gross monthly income. A high DTI from student loans can make it difficult to qualify for additional credit, especially a mortgage.
• Missed payments: Missed federal student loan payments can severely impact your credit, since payment history is such a crucial part of your score. If you don't pay a federal student loan bill for 90 days or more, your student loan servicer will report it to the credit bureaus. Not only will missed payments negatively impact your scores, but they'll stay on your credit reports for up to seven years. After 270 days of nonpayment, your loan will go into default, which has additional consequences, including wage garnishment and lost eligibility for federal financial aid in the future.

How to Apply for Financial Aid

You'll have to complete a FAFSA every year you need aid. Here are the steps to follow:

1. Start the process as early as possible. The FAFSA is available for the following school year starting in October. The federal deadline is June 30 of the school year you're seeking financial aid for, but schools' and states' deadlines are typically far earlier. Submit the FAFSA as soon as it's available so you meet your school's and state's deadlines.
2. Consider who else will need to supply their information. The information you'll need to enter depends on your personal situation. If your parents or guardian can claim you as a dependent, you'll need to supply their financial details too. If you're an independent student, you'll only report your information (plus that of your spouse, if you're married). If you have a special circumstance, such as not being in touch with your parents, you'll be able to indicate that on the FAFSA application.
3. Create an FSA ID. To make the process smoother, set up an Federal Student Aid (FSA) ID account on StudentAid.gov. You'll use it not only to fill out, sign and submit the FAFSA, but to manage any student loans you take out. Anyone who fills out the FAFSA with you, such as your parent or spouse, will need to create their own FSA ID.

4. Gather your data. Before you complete the form, make sure you have all the financial information required. For a preview of the questions you'll be asked, you can take a look at the U.S. Department of Education's step-by-step guide. As a start, collect the following records for all parties:

   • Social Security numbers
   • Federal tax returns
   • Bank and investment account statements
   • Proof of child support income
5. Fill out the form online. Completing the FAFSA usually takes less than 30 minutes, but if you don't finish it all in one sitting, you can save your progress and return later. Double-check all the fields before submitting, making sure you haven't left anything blank or accidentally inserted inaccurate info.
6. View your estimated aid. After one to three days, you'll receive an email with your FAFSA Submission Summary. This gives you an estimate of your federal financial aid, along with next steps to take, such as contacting your school to provide more information. You'll receive school-specific financial aid award letters once you've been accepted to the school.

The Bottom Line

Applying for federal financial aid using the FAFSA won't affect your credit scores. But applying for a parent PLUS loan or private loan, and repaying student loans of any type, will have an impact on your scores. To make sure your credit benefits from your experience with student loans, set up automatic payments when the loans come due. Prioritize paying every loan bill on time—even if that means eventually switching to a more affordable repayment plan if necessary.