When a student applies for an educational loan, they are subjected to a credit history check. Credit history is a record of how quickly a person repays a loan. If they failed to repay a loan, then their credit history will be poor. The better the credit rating, the lower the resulting interest rate on the loan will be. If a student does not have an established credit history, then applying with a co-signer may be necessary to qualify for a loan. A decent credit history combined with a co-signer may qualify the student for lower interest rates. The credit history of the parent of the student may also be looked into, especially if they act as guarantors for the student. If the parent has a poor credit history then the loan may be refused or else the interest rates increased.

Credit history can be judged on payment history, outstanding debt, length of time, recent inquiries on credit and the types of credit in use. Late payment on loans, incomplete or partial payments and judgments all affect a person's credit rating negatively.

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