10-15-2012 12:21 AM
I have a student loan that I just got paid down to below 4000 dollars. This is pretty much the only "good standing" consistently being paid as agreed and being reported as in good standing.
I was wondering if I should pay all of the bill except a dollar or a couple dollars so they will still report this as in good standing and open account. My next payment is not due till 2016 but I want to get as much paid off as possible. Would it be beneficial to keep a couple dollars not paid for this loan since this is my only good account?
I have a secured credit card that was just opened a couple months ago (need to stop having balance on it). Since this credit card is new and the student loan has been there since 2006 or 2007 should I try to leave this loan open?
P.S.. I had a co-signer and they only reported to the co-signers credit report once when it was past due. Is there anyway that we can remove this as it only shows up as a negative in their credit report?
10-15-2012 11:13 AM
IMO, you are better off paying it in full. Per FICO scoring, it doesn't matter if you pay it off now or 5 years from now. The history will still continue to reflect as a positive even after it's closed. The only difference would be that it'll delete roughly 10 yrs from the date you pay it off. In fact, there's a slight chance for a score uptick as another account reflects $0.
If reporting accurately on the co-signer's CRs, then that alone isn't a basis for automatic deletion. In fact, if reporting negative there it should be negative on yours too, though I wouldn't challenge them on that. Your co-signer can send a goodwill letter asking the lender if they wouldn't mind deleting the lates, but the creditor doesn't have to. There is a slight risk of the lender changing their reporting to reflect accurately on yours too.