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if you have no lates does outstanding student debt lower your score a lot?

Frequent Contributor

if you have no lates does outstanding student debt lower your score a lot?

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?

Message 1 of 17
16 REPLIES
Established Contributor

Re: if you have no lates does outstanding student debt lower your score a lot?

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.  

 

 


My Starting Score: EQ: 691 (11/30/11) TU98: 726 (11/30/11)
My Current Score: EQ: 779 (04/22/13) TU08: 835 (06/03/13)
DW Starting Score: EQ: 742 (03/02/12) TU98: 748 (03/02/12)
DW Current Score: EQ: 784 (03/11/13) TU08: 775 (06/03/13)
Message 2 of 17
Frequent Contributor

Re: if you have no lates does outstanding student debt lower your score a lot?

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?

 

 

Message 3 of 17
Moderator Emeritus

Re: if you have no lates does outstanding student debt lower your score a lot?

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.

Message 4 of 17
Frequent Contributor

Re: if you have no lates does outstanding student debt lower your score a lot?

this is very good news.  I always thought that you couldn't have an excellent credit rating with any outstanding debt.

Message 5 of 17
Frequent Contributor

Re: if you have no lates does outstanding student debt lower your score a lot?

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.


Current:
TU (5/14/14): 796 (Inquiries; 8/23/13)
EQ (3/23/14): 791 (Inquiries: 8/23/13)
EX (9/24/13): 780 (Inquiries: 7/2/12; 11/20/12; 7/30/13; 8/23/13)

Goals: No new inquiries for 2014, 800 for all CRs by 12/31/14
Message 6 of 17
Frequent Contributor

Re: if you have no lates does outstanding student debt lower your score a lot?

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.

 

 

Message 7 of 17
Highlighted
Established Contributor

Re: if you have no lates does outstanding student debt lower your score a lot?


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.


My Starting Score: EQ: 691 (11/30/11) TU98: 726 (11/30/11)
My Current Score: EQ: 779 (04/22/13) TU08: 835 (06/03/13)
DW Starting Score: EQ: 742 (03/02/12) TU98: 748 (03/02/12)
DW Current Score: EQ: 784 (03/11/13) TU08: 775 (06/03/13)
Message 8 of 17
Regular Contributor

Re: if you have no lates does outstanding student debt lower your score a lot?


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


Starting Score: 600ish in 2007
Highest Score to date: EQ 716 May 2012(lender pull)
Current Score: EQ 685 6-21-12 ; Walmart TU Fico 744 6-05-12
Goal Score: 801
Message 9 of 17
Frequent Contributor

Re: if you have no lates does outstanding student debt lower your score a lot?

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 :Smiley Happy

 

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.


Current:
TU (5/14/14): 796 (Inquiries; 8/23/13)
EQ (3/23/14): 791 (Inquiries: 8/23/13)
EX (9/24/13): 780 (Inquiries: 7/2/12; 11/20/12; 7/30/13; 8/23/13)

Goals: No new inquiries for 2014, 800 for all CRs by 12/31/14
Message 10 of 17