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Income based repayment on Student Loans and affect on credit

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Anonymous
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Income based repayment on Student Loans and affect on credit

Hi all, I have a question if anyone happens to know...I am on an income-driven repayment plan for my school loans. I owe about 13k to student loans currently and being very low income I qualify for 0$ payment a month for the next year while they report it as "Paid" or "Paying as agreed". It just occured to me, would this not be as helpful to improving my credit score? On the one hand, I'm paying as agreed and not technically making late payments but on the other hand I'm not decreasing my debt....? I'm a little confused as you can probably tell with how all of this works. I've just started actively trying to educate myself on credit about 6 weeks ago and I have a lot of "stupid questions" still.

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Anonymous
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Re: Income based repayment on Student Loans and affect on credit

I wanted to add, my ultimate goal is to be able to get a mortgage by the end of this year. Putting that out there in case anyone happens to know whether my above post would complicate that at all.

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dragontears
Senior Contributor

Re: Income based repayment on Student Loans and affect on credit


@Anonymous wrote:

I wanted to add, my ultimate goal is to be able to get a mortgage by the end of this year. Putting that out there in case anyone happens to know whether my above post would complicate that at all.


To the best of my knowledge no lender will use a $0 IBR for calculating your DTI

If you are going FHA I would read this thread about student loans, IBR and FHA: http://ficoforums.myfico.com/t5/Mortgage-Loans/FHA-changing-student-loan-payment-calculations-effective-after-6/td-p/4545748

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