Is there a credit check for GradPLUS loans?
Yes, there is a credit check for GradPLUS loans that primarily checks for any signs of “adverse credit.”
A GradPLUS loan applicant is considered to have adverse credit if any of the following conditions apply:
- The applicant is 90 days or more delinquent on the repayment of any debt
- The applicant has had any debt discharged in bankruptcy during the 5-year period before the date of the credit report
- The applicant has been the subject of a default determination on any debt, a foreclosure, a tax lien, a repossession, a wage garnishment, or a write-off of a Title IV debt during the 5-year period before the date of the credit report
- The lender must obtain a credit report on the borrower from at least one major credit bureau
- If a student is turned down for credit, the student may chose to appeal the decision to the individual’s lender (each lender will have a different appeal process) or re-apply with an endorser
- The absence of a credit history is not considered adverse credit
Legislative Update: Effective October 1, 2011, unpaid collection accounts and charge-offs represent debt that is delinquent for more than 90 days. Prior to that date, those accounts were not considered adverse credit. Now that they are, if you have unpaid collection accounts or charge-offs it may influence your ability to borrow a GradPLUS loan.