Understanding Student Loan Deferment
Student loan deferment is a temporary pause on your monthly payments, usually granted when you experience financial hardship or meet specific criteria like unemployment or returning to school. It sounds like relief—and it can be—but many borrowers worry: will deferment damage my credit?
The good news is that deferment typically doesn't hurt your credit score as long as you're approved and in good standing. However, there are important details to understand about how deferment works and what happens to your account.
How Deferment Appears on Your Credit Report
When your student loans enter deferment, they show as "deferred" on your credit report. This status is very different from late or missed payments, which would appear as negative marks.
Your lender continues to report your account to the three credit bureaus, but instead of showing a "payment required" status, it shows "deferred." This neutral status doesn't ding your credit score the way a 30-day late payment would. The key is that there's no broken payment history—the account remains in good standing.
Does Deferment Hurt Your Credit Score?
Generally, no. Approved deferment doesn't directly lower your credit score. Your payment history (35% of your score) isn't negatively affected because deferment is an official pause, not a missed payment.
However, deferment can have indirect effects. If interest accrues while you're deferred, your loan balance grows, which increases your overall debt. A higher debt balance could slightly impact the "amounts owed" portion of your credit score (30% of your score). But this impact is typically minimal compared to the damage from missed payments.
Deferment vs. Forbearance vs. Income-Driven Repayment
It's easy to confuse these options, but they work differently. Deferment pauses payments for a set period, and interest may or may not accrue depending on your loan type. Forbearance also pauses payments but always accrues interest.
Income-driven repayment (IDR) plans don't pause payments—they lower them to 10-20% of your discretionary income. IDR plans let you keep making payments, which continues building your payment history. If you qualify for deferment, you might also qualify for an income-driven plan, which could be better for your credit since you're still demonstrating on-time payment behavior.
What Happens to Your Credit After Deferment Ends
When your deferment period ends, you need to resume making payments immediately. The most important thing is to start on time—missing that first payment after deferment comes off your account would create a new late payment.
There's no gap or penalty in your credit history. Since the deferred period didn't count as missed payments, your account resumes its normal payment history as soon as you make that first post-deferment payment. Your credit report will simply show you as current again.
Tips for Maintaining Good Credit During Deferment
Even though deferment itself doesn't hurt your credit, you should still be proactive. First, understand whether interest is accruing on your loans—if it is, consider making voluntary interest-only payments to prevent your balance from ballooning.
Second, if you have other debts (credit cards, other loans), keep making those payments on time. Deferment only pauses your student loans, not your entire credit obligation. Stay on top of everything else to protect your score. If you're looking for ways to actively build credit during this period, a secured credit builder card like the Self Visa® Credit Card or Kikoff can help you build positive payment history while your student loans are paused. Read our Self credit builder review and Kikoff review to compare. You can also learn about how student debt affects your credit score and strategies for managing it.
Third, set a calendar reminder for when your deferment ends. You don't want to accidentally miss the first payment after deferment ends, which would create a legitimate late payment.
Using Deferment Wisely
Student loan deferment can be a lifesaver when finances are tight, and it won't sabotage your credit like missed payments would. The key is treating it as a temporary solution, not a long-term strategy. Use deferment to buy time while you stabilize your finances, then resume payments as soon as you can. If you're considering other student loan options, explore student loans with no credit history or focus on improving your credit score to qualify for better rates. Tools like Self and Kikoff can help you build credit during the deferment period so you're in a stronger position when payments resume.
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APR
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Credit Check
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FAQ
Does student loan deferment show up as negative on my credit report? No. Deferment shows as "deferred" on your credit report, which is a neutral status. It doesn't count as a missed or late payment and won't directly lower your credit score.
Can I get deferment on private student loans? It depends on the lender. Federal student loans have standard deferment options, but private lenders set their own policies. Contact your private loan servicer to ask about their hardship or deferment programs.
Should I choose deferment or income-driven repayment? If you can afford any payment at all, income-driven repayment is often better for your credit because you continue making on-time payments. Deferment is best when you truly cannot make any payment and need a complete pause.
Does interest still accrue during deferment? For subsidized federal loans, the government pays the interest during deferment. For unsubsidized and private loans, interest continues to accrue, which increases your total balance over time.
