Student Loans are killing my credit score

Anonymous · ‎08-14-2008

I didn't think student loans were supposed to have such a negative effect on my credit score, but they're being counted as "new credit accounts" and "credit accounts with balances". Why is this? They are installment loans, not "credit accounts", so why are they being treated as such?

Will consolidating those Sallie Mae loans help any? Part of the derogatory information on my credit report is that I have 13 active "credit accounts"...that's 3 credit cards and 10 different Sallie Mae student loans.

Any suggestions? I'd really appreciate them!

Anonymous · ‎08-14-2008

Installment loans are credit accounts. If you look at the list of credit accounts you can click them and in the detail it should show that it's an installment loan. (At least on myFico reports, not sure how it shows up if you get it direct.) The age issue will improve over time.

I consolidated mine and they show up as one. I don't know how they showed up when I actually had 8 or 9 of them open. But now it shows the history as only 1 loan for the total amount. One thing I just noticed is the consolidation loan is listed as a Note Loan whereas the original was a Student Loan, despite both being financed by the same company. None of my experience may apply as these were stafford loans..

Anyway, I wouldn't consolidate just to improve your credit reports, but if terms are favorable and there are other benefits to you, definitely go for it. This will probably mean another new account which will ding you in the short term but in the long term I think it will help your score and maybe your sanity..

Anonymous · ‎08-15-2008

Consolidating needs to be a $ decision-

Do you have balanes reporting on all 3 CC's? Try only having 1 reports and see if that flag goes away.

hmstrwheel wrote:

I didn't think student loans were supposed to have such a negative effect on my credit score, but they're being counted as "new credit accounts" and "credit accounts with balances". Why is this? They are installment loans, not "credit accounts", so why are they being treated as such?

Will consolidating those Sallie Mae loans help any? Part of the derogatory information on my credit report is that I have 13 active "credit accounts"...that's 3 credit cards and 10 different Sallie Mae student loans.

Any suggestions? I'd really appreciate them!

Anonymous · ‎08-29-2008

I consolidated my loans back in 2004. Best decision ever. My IR is 2.875% and I chose the graduated repayment plan. I owe about $25k and pay $60/mo. Pretty much just interest. I send in extra money to help pay it down.