Does credit/balance ratio only apply to unsecured debt or also to student loans.

[danny4l]

I am paying off my credit cards and I will have them paid off by 2015.  My student loans are in deferrment and I only think I will be making interest payments for the first four years till I settle down.  As a result, it says by student loans are at over 100% their original loan because of accrued interest.  Will this affect the credit/balance aspect of my score or does it only apply to the credit cards?

[guiness56]

If you are talking about utilization, that is only revolving.  Installment loans have a separate utilzation but factors little into the FICO score.

[danny4l]

This is good news.  So pretty much if you don't carry credit card balances, that part of your score is guaranteed to be good.

[Gunnar419]

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@danny4l wrote:

This is good news.  So pretty much if you don't carry credit card balances, that part of your score is guaranteed to be good.

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Actually, you DO want to carry credit card balances. Just very small ones, which you can pay off shortly after they report to avoid paying interest. But the scoring systems don't like seeing NO balances. Even a $10 balance is better than having zero on all cards.

Otherwise, you sound like you're doing great. And good luck!

[guiness56]

For optimum scoring, let all but one card report a 0 balance.  Let one report at 9% or below.  YMMV so you may need to experiment to see what works best for you.

[Shogun]

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@guiness56 wrote:

For optimum scoring, let all but one card report a 0 balance.  Let one report at 9% or below.  YMMV so you may need to experiment to see what works best for you.

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+1  Personally I've found the sweet spot for mine at 4%