12-26-2012 03:58 PM
I used to have a $5,000.00 student loan from Direct Loan. I was supposed to start paying it on december 26 of 2012 but I paid in full before I officially started paying it.
I have the following questions:
Paying in full before officially starting to pay as supposed, help my credit score in any way?
How long I will have to wait to see the loan removed from my credit report? (even paying it completly before the start)
Doing this can increase my chances to get a credit card?
12-27-2012 08:35 PM
Paying in full before officially starting to pay as supposed, help my credit score in any way? No, paying it off before you come out of your grace period will not have any impact on your credit score. Paying off installment loans in general has very little impact on your score, it may move it a few points up or down, depending on other factors (like how many other accounts you have, and what types they are)
How long I will have to wait to see the loan removed from my credit report? (even paying it completly before the start) The loan will be marked as Paid in Full shortly, probably within a month of paying it off. This depends on when the payment posts, and how often your lender reports. Then, as a good account, it will stay on your report for about 10 years.
Doing this can increase my chances to get a credit card? Probably not. It may help your debt-to-income ratio, so you may be eligible for a higher credit line.
What you're doing is awesome financially. You've paid off the loan before you have to pay any interest, and you'll have a positive account on your report for many years to come. Lenders are going to look more at your open accounts, payment status (any lates), than they are at closed installment accounts in terms of granting credit though.
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