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My lates will be removed in 2017. At that time, I will have over 120000 in student loan debt outstanding. I don't think I will pay that off for at least 15-20 years so how is my score going to look even though I will have no lates or anything else but just the outstanding debt?
Is it still possible to have 750 plus while you are carrying 1200000 of student debt?
Outstanding debt, surprisingly has little effect of the score. It is about how you have met your deb obligation through prompt payments. Having said that, a lot of outstanding revolving debt (credit card) will impact your score some.
If I was in your shoes, I would concentrate on paying on time and getting the revolving debt down.
so if I am still carrying that student debt but I have no lates, no derogatory accounts, and no accounts with balances, you mean I can still have an excellent credit rating?
Yep, installment loans are viewed on par with mortgages, auto loans, etc. There are plenty of folks with 800+ FICOs with $100k-$500k+ in installment debt. It's a tiny aspect to FICO scoring. To hit those high FICOs though, you would need a good mix of credit which would include at least 2-3 CCs with balances in check. And a long history too.
this is very good news. I always thought that you couldn't have an excellent credit rating with any outstanding debt.
My scores are in the low 700s and I recently graduated with 225k in loans (it hurts me to type that number). Hopefully they will be in the mid 700s later this year once I pay down a CC or 2 that are a bit higher than I'd like. When I run the score simulators, the student loans are never an issue, I get messages saying I should add a mortgage and have a higher AAoA.
This is all good news. Just yesterday, I was thinking that my financial life would be ruined for another 20 years or so due to my student debt. Now in only a few years, once the derogatories fall off my report, I think I can really start the rebuilding process. That's a good feeling.
@danny4l wrote:This is all good news. Just yesterday, I was thinking that my financial life would be ruined for another 20 years or so due to my student debt. Now in only a few years, once the derogatories fall off my report, I think I can really start the rebuilding process. That's a good feeling.
Rather than taking our words for it. You should pull a score form here (Equifax) and see for yourself.
@GST2008 wrote:My scores are in the low 700s and I recently graduated with 225k in loans (it hurts me to type that number). Hopefully they will be in the mid 700s later this year once I pay down a CC or 2 that are a bit higher than I'd like. When I run the score simulators, the student loans are never an issue, I get messages saying I should add a mortgage and have a higher AAoA.
I hope you got a MD for that much money. Even if I go to a private law school, when I combine all of my present student loans with potential future loans my undergrad, MBA and JD will be around 150k
Doctorate in psychology, but that figure includes: 4 years of undergrad, 4 years of grad school for a Master's and certificate of advanced study, and then 5 years for a clinical doctoral program. I should be able to get most of it forgiven though :
Plus, now that I have a doctorate if I teach as an adjunct, I can take courses for free. I plan on adding an MBA to my collection as well in the future.