To me, my answer to should I pay off/down my student loans wouldn't be answered by if it helps me get a Citi card approval.
I know the student loans help with length of account age, so I'm assuming it has to have some sort of effect on other parts of your score, but sadly I don't know. Hopefully someone wiser will come by and educate us.
Good luck on your journey!
I know the student loans help with length of account age, so I'm assuming it has to have some sort of effect on other parts of your score, but sadly I don't know. Hopefully someone wiser will come by and educate us.
Good luck on your journey!
@Jungook wrote:Will making payments on my student loan increase my chances of being approved by Citi for a credit card?
I currently have an sub and unsub federal loan that I've been making payments on but should I try and pay even more off even though my loans are deferred for another 4 years?
and do student loans affect utilization? Or is that only affected by revolving credit?
If you have the money to pay your loans down then I would do so. Its in your best interest all the way around. You save money on interest payments, the credit card companies see you making payments which is a positive and it lowers your debt to income ratio. I have massive amounts of student loans and if I could pay a huge chunk of them off I know it would make me a much better credit canidate. That being said don't do something drastic to pay them down. If you can't make the larger payments or if it would be financially difficult I wouldn't lose sleep over it. The most important thing is that the loans are in good standing as they will not prevent you from getting credit. On a side note I would not make the bare minimum payments, because sometimes these loans are structured where you are only paying the interest and not the principal, which means you will never get out from underneath the loan debt. It took me years to realize this.
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@Anonymous wrote:
@Jungook wrote:Will making payments on my student loan increase my chances of being approved by Citi for a credit card?
I currently have an sub and unsub federal loan that I've been making payments on but should I try and pay even more off even though my loans are deferred for another 4 years?
and do student loans affect utilization? Or is that only affected by revolving credit?
utilization is affected only by revolving credit.
Making payments to your student loan will increase your chances of approval in the sense that a lower balance on your student loan will lower your DTI ratio, which banks also evaluate during their decision process. It will however not alter your FICO score much, I think, simply because it is not revolving credit. I may be wrong though.
When I started back applying for credit cards I was told by some of the credit report analysis sites that one of the factors dragging down my score was my debt to income ratio being too high. Granted it was part of a laundry list of reasons and there is no way to tell how much that one factor is weighted in the score vs other factors. Since I do not consider my score to be horrific especially given some baddies I had and lack of cards I suspect its not a major factor when the debt comes from student loans.
@Simply827 wrote:I was approved for Citi with 75k of SL debt. I don't think it matters much unless your payments happen to be a huge chunk of your income.
+1 My student loan debt is way way more than this and I am able to get approvals.
