With the incorporation of student loans' information into individuals' credit files later this year, any missed payments will show up as black marks against their credit rating.
As lenders' credit checks tap into this data, it will affect mortgage approvals for those with outstanding debts - typically within the first-time buyer age bracket - meaning that any defaults on loan repayments could end up dragging them down.
mform.co.uk believes these plans to be unfair due to the nature of only including missed or defaulted payments. This bypasses the details of how an individual has made their student loan repayments, which would largely have a positive impact on their credit rating.
“The average student can face debts of over £20,000 by the time they graduate, and their average starting salary is around £16,000," said Francis Ghiloni, marketing and business development director at mform.co.uk.
"Given statistics like this, many students miss one or more of their student loan repayments, and this information will soon be made available to credit reference agencies and therefore the banks and financial services companies that use them. If they can see a history of missed payments here, they are likely to be less willing to lend you money.”
To date, the Government has not yet announced when it plans to pass this data to UK credit reference agencies.
