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Will paying off student loans...

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Will paying off student loans...

I am currently a junior in college and by the time I graduate in a year, I will have about $20,000 in student loans reporting on my credit reports. Will paying the full balance upon graduation do anything to my credit scores?


Starting Scores: EQ [ 525 ] TU [ 567 ] EX [ 565 ] - 02/17
Current Scores: EQ [ 573 ] TU [ 581 ] EX [ 596 ] - 03/17
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Re: Will paying off student loans...

It depends on what other installment loans you have.  If you have other installment loans and the balance owed on those loans is not signifcantly lower than the original balance you borrowed, then yes, paying off your student loans will temporarily have a negative impact on your credit score.  But if you have another installment loan where the balance in relation to what you originally borrowed is pretty low, then no, you won't see as big of an impact.

 

Even with this said, there are great benefits to getting your student loan debt paid off sooner rather than later as it saves you money in interest in the long run.  The closed accounts will remain on your credit for 10years in good standing.

 

Also, if you have other baddies on your report that are pulling your score down, then this impact would likely be pretty minimal in comparison.


Starting Score: Eq: 662 Tu: 532 (03/02/2011) CH7BK 01/12/2009 Discharge
Current Score: Eq: 712 (02/03/2017) Tu: 717 (04/03/2013)
Goal Score: Eq: 760 Tu: 760

Wallet: PenFed Power Cash 25k | AMEX Blue Cash (AU) 49.5k | Cap One QSMC 26.5k | AMEX Platinum NPSL | LFCU Visa 10k
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