How student debt may actually help you in the long run

Although many college graduates feel smothered by their student loan debts, this kind of burden is actually beneficial to helping you develop a stronger credit score.

When lenders consider offering you a loan or a new line of credit, they will request an inquiry into your credit report that will help them determine whether or not allowing you to borrow is a wise choice.

What these lenders will be looking for primarily is the amount of "good debt" and "bad debt" you possess and how well you have been able to manage it.

"Good debt" is classified as the loan agreements that a responsible borrower is working towards paying off completely. These are things like car loans, mortgages and student debt. When payments have been met regularly on this "good debt," it signals to a lender that you can handle taking on more loans.

On the flip side, "bad debt" is the kind that continually builds without any sign of coming close to zero. If you have several department store credit cards, for example, that were given to you with an extremely high interest rate, this will weigh down on your credit score and may decrease the likelihood that you will be able to qualify for a new loan.

Of course, good debt can turn bad if it isn't managed properly. If a student defaults on their college loan because of missed payments then a lender will not be inclined to allow this student to borrow. This is why graduates need to negotiate a student loan repayment plan to ensure that their debt from attending college actually works in their favor.

College Financing Group has experienced financial aid consultants on hand that can provide help for students by drafting a solid repayment plan for their loans and exploring the available options.