Suspended Payments on Student Loans Allowed Many to Pay Down Other Debts and Boost Credit

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During the pandemic, student loans were suspended. This allowed many to pay off other debts they owed and even increase their credit scores. This provided many Americans with an opportunity to improve their financial stability in a way they have never previously experienced.

The forbearance period for student loan payments has been extended to August 31, 2022. This looming deadline has led many with student loan debts to worry about backsliding.  

Since March 2020 when the government suspended payments on federal student loans, the credit score of the average American rose from 640 to 668 (according to an analysis by the Student Loan Initiative and California Policy Lab). Borrowers were also able to reduce their use of credit cards by around 23%–a massive decrease.

Student loans aren’t the only debts many Americans face. Around 85% of those with federal student loan debt also owe money for mortgages, auto loans, credit cards, and more. The median overall balance for these debts is around $19,121. This brief reprieve from student loan debt has allowed many Americans to start paying these other debts down.

By the end of 2021, an estimated $1.6 trillion in student debt was owed by around 43 million Americans. During the forbearance, they were able to save around $37.8 billion in interest (as per the Bureau of Economic Analysis).  

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During the pandemic, expenses have gone up significantly. This is especially so for real estate prices, with the value of the average home increasing by over 20% in the past year alone. The relief students have experienced has helped with their ability to save money, improved their ability to keep up with surging expenses, and improved their ability to reduce the amount owed on other debt.  

This relief will go away in late August, as student loan payments will resume. This leaves millions of Americans to contend with rising prices and major inflation. Because of this, there is an expected surge in delinquency rates once payments resume.

The California Policy Lab and Student Loan Law Initiative have found that one in three borrowers (around 7.8 million people) are at a high risk of missing payments when they resume at the end of August.

While there have been a variety of different proposals to cancel student loan debt over the years, none have moved forward. Joe Biden promised $10,000 of student debt forgiveness per borrower during his presidential campaign, but this has yet to come to fruition.

What is Credit Repair?

With student loan payments resuming, credit repair may need to be considered.

The goal of credit repair is to correct less than perfect credit situations and restore credit. The process requires precision, industry knowledge, dedication, and effective time management. Pyramid Credit Repair is able to provide you with long-lasting results. We don’t offer a “quick fix” solution, but one that can lead to a lifetime of better credit.

How Pyramid Credit Repair Can Help

At Pyramid Credit Repair, we focus on targeting inefficiencies. We take a look at your spending habits, debt management, credit management, and more. We provide thorough credit audits to better learn why your credit score is what it is and then create solutions to resolve these credit issues. One of the best ways you can improve your credit is by paying your bills on time. We take a look at your expenses and bills, then put together a schedule to help with on-time payments. We also look at your spending to see where changes can be made to improve your ability to make on-time payments.

We provide our customers with real-time results, so they are able to track their progress. We also provide our customers with live assistance to answer questions that may come up.

Pyramid Credit Repair understands the challenges that those with student loan debt face and will continue to face once student loan payments resume. It is our mission to work with those that have fair to poor credit to increase their credit and maintain this increase. For those that have increased their credit during the student loan payment suspension, we will work with you to ensure your credit doesn’t drop once payments resume. We do this by helping our clients to better understand their credit scores, answer questions they may have, put together a game plan, and dispute any credit misrepresentations. Plans are available both for individuals and couples.

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Pyramid Credit Repair has been in the business of credit repair since 2011 and has grown to be a full-service credit repair company over the years. We pride ourselves on our expertise and stellar reputation. We have helped thousands of individuals and families to reach their financial goals throughout the years.

Some of the things you can expect from Pyramid Credit Repair include hard work, transparency, innovation, and customer service. Our team prioritizes your needs, and we do everything we can to help you to reach your credit goals.

Call or reach out online to learn more about how we can help you to improve your credit once student loan payments return and beyond. We will provide you with a risk-free assessment and we can even help with the dispute process. We work on improving credit scores for all three major bureaus, and we offer a money-back guarantee. There are no hidden fees or surprises with pricing. We are completely open, and we allow you to pay as you go. Our support is available 24/7, and we work one-on-one with our clients to create a personalized plan. There is no “one size fits all approach” to improving credit. That’s why we work with you to put together a game plan that meets your needs.

Reach out today to learn more about how you can improve your credit and/or maintain your improved credit once student loans continue. We look forward to working with you and helping you to achieve your credit goals.