07-14-2014 06:03 PM
I have a lot of student loans, going back to 2004 to 2008. Then masters from 2012-2014. For most of the loans origination, they were in deferment status with a few periods of monthly payments. I have both SalleMae Private and US Gov. loans which I never have been late on.
Now all my loans are out of deferment and I am paying them back. I noticed on my fico one of my problems is installment loans are too close to their limit. Therefore, I am paying them back on a standard prepayment plan. HUGE monthy payments have made me keep my revoling utilization at about 1-5% because I am paying almost 1100 dollars a month on the loans.
Now that these loans are out of deferment, I noticed my TU score drop but EQ score rise and the only difference is the deferments/ account information.
Will paying these loans monthly get my score back, im talking an 18 point drop over night. I want to enter a different payment plan because the loans payments are restricting me a lot but yet manageable with strict disipline.
07-14-2014 07:55 PM
Continuing to pay your loans on time will of course lead to a good FICO score, but you won't see an impact from each individual payment. You're also really not seeing much of a ding from the utilization on your installment debt - it is a very small part of your score, especially compared to util on your revolving accounts, which it sounds like you are managing well.
Choose a payment plan that balances affordability with being able to pay the loans quickly and save yourself some interest. I would focus on repaying the private loans first, and put the federal loans on the lowest payment you qualify for. Private loans are nastier than federal if something goes wrong, because they don't have the income-based payment options and mandatory forbearances.
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