cancel
Showing results for 
Search instead for 
Did you mean: 

Student loan principal increases affect FICO score?

New Member

Student loan principal increases affect FICO score?

My loans are in IBR. They are increasing at 40$ per month. I'm now at ~114% of the original principal. Is being over 100% hurting my scores?

Message 1 of 4
3 REPLIES
Established Contributor

Re: Student loan principal increases affect FICO score?


dudesgirl wrote:

My loans are in IBR. They are increasing at 40$ per month. I'm now at ~114% of the original principal. Is being over 100% hurting my scores?


I can say that being at 100% definitely hurts...not sure if the algorithm punishes further for >100%

 

I am in the same boat, with negative amortization growing that balance each and every month...I don't know if the fact that it's 114% hurts more than 100%, but I can tell you that every score simulator I've tried tells me I can get an 'easy' 15-20 points by paying about $15k to bring my balance back under 100% (fat chance!)

 

Good Luck!

Message 2 of 4
Highlighted
Valued Member

Re: Student loan principal increases affect FICO score?

Definitely hurting your scores. Currently my student loans are the only installment loans on my report and because they accrued so much interest in deferment and forbearance, the past 5 monthly payments still haven't bought me to 100% and I overpay by a hundred or more. Also, this causes your report to describe you as having "proportion of account balances to limits is too high." Been dealing with it for so long but hopefully after next month I'll be able to pay it down at least 1k monthly. Current balance is 11k with nelnet among 4 different loans when the original loans were for $3k, $3k, $2.5k, and $1.5k. Now each of those have tacked on just about or over 400 or so in interest to the original balance. Can't wait to pay them down by the end of the year
Message 3 of 4
New Contributor

Re: Student loan principal increases affect FICO score?

I was about to ask this same question! I've dealt with all of the other baddies and I've noticed my CR has changed is really limited to my student loan balance increasing each month. So much for the benefits of IBR outside of lower payments of course. Now, I think I need to calculate my own payments to at least pay interest + $1 each month.
Message 4 of 4