Could alternative credit favor into student loan applications?

Could alternative credit favor into student loan applications?

Could alternative credit favor into student loan applications?

Post-secondary education is, without a doubt, one of the most exciting endeavors in life for most people. This is often the case no matter where it happens for you (or your child) - at a four-year college, as part of a two-year associate's degree program at a community institution or perhaps on the long path of learning that can lead to a career in law or medicine.

"Alternative credit data might be of assistance to those pursuing financing for college."

By contrast, the process of paying for the time spent in college is much less exciting. In fact, it can be very daunting and stress-inducing if you don't go about it with care. Today, we'll take a look at the nuts and bolts of college financing process, and also touch upon how alternative credit data might be able to make the search for loans somewhat easier. 

Get started with the FAFSA
The Free Application for Federal Student Aid - commonly referred to by its acronym, FAFSA - is typically the first block upon which prospective college students and their parents build a case for need-based financial aid.

Most college financing journeys begin here because submitting the FAFSA and getting it back, whether you receive aid or not, allows applicants to gauge how their income will appear to lenders in future financing negotiations. Also, if you or your child is deemed eligible for federal financial aid, it reduces the amount of money you'll need to pursue from state or local government aid programs, as well as private sources.

Know your exact borrowing needs
As pointed out by The College Board, borrowing more than is necessary for tuition, room and board (if applicable), textbooks and other supplies is unwise - it may ultimately lead to greater monthly payments and higher interest rates. Also, if seeking aid from a private lender like a bank or credit union, loan officers will want to see financing applications that appear reasonable, not greater-than-necessary requests that paint applicants (fairly or unfairly) as credit risks. 

Alternative credit can help
The financial landscape has changed considerably over the past decade, due in no small part to flaws in the system exposed by the 2008 financial crisis and Great Recession that followed. Traditional measures of Americans' creditworthiness, like old-fashioned credit scores, don't apply across the board like they used to. 

Because of this, it may benefit both lenders and college aid applicants to consider what an alternative credit report can reveal about their financial situations. Credit decisioning tools from Microbilt may be just right for proving creditworthiness in the search for higher education financing.