Admissions Academy Blog

When it Doesn’t Pay to Shop Around

Posted by Sarah Ziegler on July 25th, 2008 in Articles of Interest

An article from today’s New York Times highlights a little-known fact about shopping for student loans. Unlike comparison shopping for home mortgages or auto loans, a query to a student’s credit report for a student loan can potentially bring down the student’s (and often the parent’s) credit score. With every attempt to find a lower interest rate, students and parents may end up paying a higher one, as banks are more likely to charge higher rates to borrowers with many credit inquiries and correspondingly lower credit scores. The article also points out how little data is available to borrowers about how different companies and credit agencies treat these inquiries.

Click here to read the full article for suggestions and further resources on student loan shopping.

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