noob - how do student loans affect your score?

[mindaugas]

I have a couple student loans that are fairly low amounts. All of them are on time. One is through AES and the other is a Direct Federal. Both combines are around $6k. I'm just wondering how much the loans affect my score. Thanks for any info and sorry if this has been asked before. I did some searching and didn't find much.

[llecs]

Any open, positive account (CCs, mortgages, loans, LOCs, SLs, car loans, etc.) impact your score in a number of ways.

The most obvious is the balance. Part of your score includes installment utilization. This is dividing the balance into the org. amount of the loan. BUT this is such a small, tiny part of your score, that you likely won't see a change in score if you paid it down to $1000 tomorrow.

Another impact is the age of the SL. When you first opened it, you could have received a ding in score that gradually faded over the next several months. So, unless brand new, there's likely no lasting negative impact.

Another is the age of this SL in relation to the rest of your accounts (AAoA). If this is younger than your AAoA, then you are taking a point hit as it continues to report. However, I bet this is one of your older accounts and that would have a positive impact to your score. Its deletion, which comes 10 yrs after you pay it off, could impact your score for the negative if you lower your avg. age with new accounts between then and now.

Finally, any negative baddie associated with this TL will have a negative impact on your score. Never be late and all will be OK.

[Guardian]

So if I understand it correctly, as long as its open in good standing, it will help you and not hurt you because of the age contribution and will continue to report until long after paid off, so it will be one of your oldest accounts then, right?

[Anonymous]

I have fairly large amount of student loans from grad school and it was only used negatively against me by Amex because they included SL into utilization calculation.

[llecs]

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Guardian wrote:
So if I understand it correctly, as long as its open in good standing, it will help you and not hurt you because of the age contribution and will continue to report until long after paid off, so it will be one of your oldest accounts then, right?

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Per FICO scoring, you are correct. As the prev. poster pointed out, some lenders may from on high installment balances or may look down on having multiple installment accounts.

[Guardian]

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@llecs wrote:

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Per FICO scoring, you are correct. As the prev. poster pointed out, some lenders may from on high installment balances or may look down on having multiple installment accounts.

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Gotcha, thank you. I figured as much as the last poster mentioned but I figured it had to have some benefit too especailly that my revolving credit line is high and my util is very low, so it balances out pretty well. Thanks.

[llecs]

I couldn't type..."frown" not "from".

[Guardian]

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@llecs wrote:
I couldn't type..."frown" not "from".

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I got it boss, no problem. I am pretty good at reading between the lines We good.