Can I Get a Student Loan if My Cosigner Has Bad Credit?

You typically need a good credit score to qualify for a student loan. If you're a student with bad credit or no credit history, you may need a cosigner to help you fund your education. In fact, 84% of borrowers who applied for private student loans in 2024 did so with a cosigner, according to data from the Credible marketplace.

But what if your cosigner also has bad credit? In some cases, you may still be able to secure a student loan with a bad-credit cosigner. Here's what you need to know.

Current private student loan rates

Can I qualify for a student loan with a bad-credit cosigner?

You can qualify for federal student loans if you or your cosigner has a poor credit score. Federal Direct Loans generally don't require a credit check, with the exception of Direct PLUS Loans for parents and graduate students.

“The credit-check process for a PLUS loan is less intense than one for a private loan, as it is only looking for adverse credit history,” says Megan Walter, senior policy analyst at the National Association of Student Financial Aid Administrators (NASFAA).

While it's possible to get a private student loan if your cosigner has bad credit, it's usually more challenging and much more expensive.

“The feasibility of getting a loan depends on how poor the cosigner's credit score actually is,” says Walter.

“If the cosigner's credit is only slightly below average but their income is stable and sufficient to cover the loan payments if needed, some lenders may still approve the application,” Walter adds. “If approved for a loan, the interest rate or terms may be less favorable than others.”

See Also: What To Do if You're Denied a Student Loan With a Cosigner

What credit score do I need to cosign a student loan?

Most private lenders require a cosigner to have a credit score of at least 670, which is considered “good” under the FICO scoring model. But even though credit score is the primary factor lenders assess, they also consider other aspects of a cosigner's financial profile.

Some lenders will let you qualify with a lower credit score depending on other factors like your income, employment, debt-to-income ratio. However, they're likely to charge higher interest rates to offset the risk.

The chart below shows the average prequalified rates by credit score for borrowers who matched with a lender through Credible.

What is the best student loan for cosigners with bad credit?

• Federal Direct Loans: If you or your cosigner has bad credit, federal student loans are the best place to start. These are no-credit check loans, and all eligible borrowers get the same fixed interest rates for the academic year. You can apply for Direct Subsidized or Unsubsidized Loans, and if you still need more funding, consider PLUS loans for parents or graduate students.
• Ascent: Ascent is a lender that offers no-cosigner private student loans that don't rely on credit. Instead, eligibility is based on factors like your major, GPA, academic performance, and your school's cost of attendance, among other factors. However, these loans are only available to full-time juniors and seniors at eligible colleges.

How to get a student loan with bad credit

If you or your cosigner has bad credit, you still have options:

• Start with federal student loans: “If cosigners aren't an option, federal student loans should be the first option, as they don't require a credit check or cosigner for most loan types,” says Walter. Completing the Free Application for Federal Student Aid (FAFSA) opens access to federal student loans, grants, work-study programs, and scholarships.
• Improve your credit score: If time is on your side, any efforts by your cosigner to improve their credit can increase the odds of approval and more favorable private student loan terms. Strategies to improve credit scores include paying bills on time, reducing debts, and avoiding applying for credit cards or opening new lines of credit.
• Secure additional income: Private lenders want to know that you and your cosigner can successfully meet repayment obligations, and income is a significant factor in determining the likelihood of this. An additional income stream, such as from a part-time job, can help improve the odds.
• Find a new cosigner: It's not always easy to find a cosigner. After all, they must take on a tremendous financial responsibility. But if your current cosigner doesn't meet the lender's requirements, it may be time to pursue an alternative cosigner, such as another parent or family member.

Tips to improve your credit score

If you're struggling to get approved for a student loan, taking action now can make a difference. Lenders may look more favorably on borrowers who are “taking steps to resolve those issues in the moment,” says Bruce McClary, senior vice president of communications at the National Foundation for Credit Counseling.

Here are a few ways you can improve your credit score before applying for a student loan:

• Pay your bills on time: On-time payments are one of the most important factors in your credit score. Consider setting up auto-pay or reminders to avoid missing due dates.
• Keep your credit balance low: Credit utilization measures how much of your credit limit you're using. For example, if your limit is $1,000 and your balance is $300, your utilization is 30%. Try to keep it under 30% to help your score.
• Avoid applying for new credit too often: Opening several new accounts in a short time can lower your score. Try to space out new credit applications when possible, especially before applying for a student loan.
• Check your credit report for errors: Visit AnnualCreditReport.com to get a free copy of your credit report. Review it for mistakes, such as incorrect balances or closed accounts that still appear open, and dispute any errors with the credit bureau.

If you need help navigating credit or debt issues, McClary recommends contacting a nonprofit credit counseling agency or visiting NFCC.org to “talk to somebody about how to deal with the debt management challenges you have in front of you.”

Alternatives to paying for college

If taking out a student loan isn't possible because of your credit or a bad-credit cosigner, you still have options to help manage college costs.

• Scholarships and grants: Unlike loans, scholarships and grants don't need to be repaid. Start with the FAFSA to see what federal and state aid you qualify for. You can also search for private scholarships on sites like Fastweb, Scholarships.com, and Going Merry.
• Employer tuition assistance: Some employers offer programs that help eligible employees pursue higher education or training opportunities. These programs generally work by reimbursing employees for eligible academic expenses, such as tuition, fees, and supplies, or by paying the institution directly.
• Consider a more affordable school: Starting at a community college or attending an in-state public university can lower your tuition and fees by thousands of dollars. You can also explore schools with strong financial aid programs or tuition guarantees to reduce your need for loans.