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Regular Contributor
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Registered: ‎11-08-2012
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Does having a student loan help or hurt your credit?

Does having a student loan help or hurt your credit?

 

My student loans are now up to $18,500 and I'm still a student (so not paying on it yet and of course they are just reporting the high balance and 0 past due).

 

Is this actually helping or hurting my credit by being on there? Or does it not effect anything until I start paying on it?

TU: 804 EQ: 810 EX 785


***$7500*** **$3,100**** **$9000**** ***$11250*** ***$3,100*** ***$4500*** ***$6000*** ***$8000*** ***$3,000*****$3,000***



Established Contributor
Posts: 754
Registered: ‎11-20-2012
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Re: Does having a student loan help or hurt your credit?

It's not really doing much at the moment. Once you start paying, you'll be able to show good payment history and that will help your score. Other than that, it might count in some fashion if you're planning to app for a mortgage or something. Are you doing that anytime soon?

Valued Member
Posts: 40
Registered: ‎04-04-2013
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Re: Does having a student loan help or hurt your credit?

It helps a little bit. It's SOMETHING on your credit report, and in my experience, they report each month. You're likely to be approved for store credit cards with minimal balances at this point, perhaps a student credit card, if you're looking to build credit off of this.


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Established Contributor
Posts: 754
Registered: ‎11-20-2012
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Re: Does having a student loan help or hurt your credit?


blitz wrote:

It helps a little bit. It's SOMETHING on your credit report, and in my experience, they report each month. You're likely to be approved for store credit cards with minimal balances at this point, perhaps a student credit card, if you're looking to build credit off of this.




 

Just out of curiosity - how do they report while you're still in school? If no payments are being made, don't they report as deferred or something?

 

 

Regular Contributor
Posts: 231
Registered: ‎03-09-2013
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Re: Does having a student loan help or hurt your credit?

I'm also curious about this. I just took out a SL, I am in school. I will be in school for the next two years. I'm wondering if this is going to show up on my CR now or not until I begin paying on it after graduation. If it doesn't show up until I graduate, will the account be dated for the date I start paying or from the date the loan originated?  

 

Here's why I ask, if it shows up now, it will increase the overall debt on my report and affect my AAoA. If it doesn't show up until I start paying and is dated for when the loan originated, it won't hurt my AAoA as much because it will show up already two years old.



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Re: Does having a student loan help or hurt your credit?

[ Edited ]

If I recall - and keep in mind this was back in the Stone Age, and I wasn't all that hipped on checking my credit report back then - mine showed up while I was still in school, but with no payment info. Payment was listed as my target graduation date.

 

We do get occasional posters lamenting the hit to the AAOA caused by a student loan each semester, so I'm thinking it does show up while one is still in school.

 

ETA: Yeah, like this one right here: http://ficoforums.myfico.com/t5/Student-Loans/Student-Loans-as-New-trade-Lines-each-semester/m-p/196...

Regular Contributor
Posts: 231
Registered: ‎03-09-2013
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Re: Does having a student loan help or hurt your credit?

That stinks but I guess I shouldn't complain...it may hurt my AAoA right now but in two years I will have 2 positive accounts for free lol. 



Starting Score: FAKOs EQ 537 TU 497 EX 517
Current Score 7/11/13: FICOs EQ 650 TU 659 EX 655
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Re: Does having a student loan help or hurt your credit?


hopingsoon wrote:

That stinks but I guess I shouldn't complain...it may hurt my AAoA right now but in two years I will have 2 positive accounts for free lol. 


And....a better education. In the long run, this is a good thing too! Smiley Happy

Contributor
Posts: 268
Registered: ‎10-25-2012
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Re: Does having a student loan help or hurt your credit?

I'm still trying to figure this stuff out too.

 

My CR says that I opened 6 accounts last year....but I was so confused because I only opened 3 new credit cards. Apparently the other 3 are showing as student loans. Now its stating I have a total of 9 accounts open...but I only actually have 4 credit cards.  I had gotten a student loan back in 08, but was paying on it until I got back into school last year. It went into defferment, and now I have taken out 2 more student loans last semester. I think I have a total of around 10,000 in student loans. 

 

Are these considered installment loans?  Do these look good in a mix with having credit card accounts?

 

I have to continue taking more loans out each semester for the next 2 years! ugh!  I wont be paying on them until I'm done with school and get a job. So I'm not sure how this is affecting my report either.

 

Since it's no longer being paid on, is it still reporting? Is it just reporting as a new account with a high balance?  Is this hurting my score or doing nothing?

 

I have to apply for new credit in the next couple of months, and now I'm concerned that they will look at these "new accounts" with high balances, and deny me.


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Re: Does having a student loan help or hurt your credit?

Most students graduate with at least 4 or 8 student loan tradelines on their report, depending on if your lender considers a yearly disbursement one loan, or if they give you a new loan each semester, add to that the fact that many students also receive different types of funding, and you can easily have 10+ tradelines for 4 years of school.  This is normal, and it won't cause lenders special concern.  It can lower your AAoA temporarily, but can have a powerful positive effect on it as those tradelines age.

 

While I was in school, my loans reported as "Pays As Agreed - In-school" or a similar status with the next payment date listed as my anticipated graduation date.  Your deferred loan from 2008 should report basically the same way.  That's not a negative status, and it doesn't impact your score.

 

How that will impact your ability to get other credit really depends on the rest of your file and your debt-to-income ratio.

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