You wouldn’t be crazy for considering skipping a student loan payment during this pandemic. Money is a scarcity right now. However, it helps to consider the big picture. If you miss one payment, that snowball of a move quickly becomes a financial avalanche.
Missing a federal student loan payment, even just one, will negatively impact your credit score. Your payment history makes up 40% of your credit score. When you miss one payment, your lender will report it to the credit bureaus and just like that, your credit score will drop. A low score will hurt your chances to get good credit card deals and could prevent you from getting a mortgage. Yes, this could all happen after just one missed payment.
As Money notes, the longer you wait to pay your student loan, the worse things can get. If you are more than 90 days late for a payment, your lender could put your loan into default. When a loan is sent into default, the loan is sent to debt collection agencies who will hound you for that money. Defaulting a loan could even lead to your property getting seized.
We’re giving you the doom and gloom treatment because it is extremely important to make your payments on time. Thankfully, during the pandemic, you’re getting a reprieve. If you have a federal student loan, it has been placed on forbearance through the end of the year. That means you’re not required to make any payments, and there is no interest being charged either. However, if you are able to make payments, you should. The faster you pay down that debt the better.