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Should I pay off my student loans if it means hurting my credit?

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ivermcgyver
New Member

Should I pay off my student loans if it means hurting my credit?

Hi all! This is my first post so forgive me if I leave something out.

 

I'm in the process of paying off all of my student loans. I just realized today that my loans are some of the longest accounts open on my (very short) credit history. I'm 22 and my oldest account is a  4yrs 9 mo old wells fargo CC. My student loans range from 4yrs 5mo - 1yr 6mo old. 

 

I just recently (within the past year) started to build my credit so I have a 5mo old AMEX BCP, a 4mo old Chase SP and I just applied for the Chase Freedom today. Everything is VERY new. AAoA is 2yrs 5mo. CS across all 3 bureaus is 750-760.

 

My question is, should I pay my oldest loans down to a couple of cents and make payments on them each month to keep my AAoA up? My loan interest rates are around 3-4%. it seems counter intuitive to leave them to collect interest.

 

 

3 REPLIES 3
RobertEG
Legendary Contributor

Re: Should I pay off my student loans if it means hurting my credit?

Paying off a loan does not per se remove it from your credit report or from yur AAoA calculation under FICO.

 

Removal will only happen either if the creditor thereafter decides to positively report deletion of the entire account, or if the account reaches approx ten years after date closed, at which time the CRA will normally delete under their own housecleaing procedure.  The consumer has no control over those subjective deletions.

 

Personally, I would opt to save $ by paying it off, and let the subjective determination of ultimate deletion of the account run its course.

Message 2 of 4
ivermcgyver
New Member

Re: Should I pay off my student loans if it means hurting my credit?

 let the subjective determination of ultimate deletion of the account run its course.


woah.... try saying THAT 10 times fast.

 

I didn't realized paying the loans off wouldn't close the account. I'll go ahead and do that then. Thank you so much!

Message 3 of 4
RobertEG
Legendary Contributor

Re: Should I pay off my student loans if it means hurting my credit?

It WILL close the account.

However, it WONT delete the account from inclusion in your AAoA calculation under FICO.

Message 4 of 4
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