First time Student Loan- Help Please.

[Anonymous]

Hi All,

I have accepted student loans for the upcoming semester, and have zero experience. What impact can I expect on my report/fico8/9 when the loan starts reporting?

Currently, I have several cc, but no installment accounts.

It is a Fed Stafford loan, if that matters.

[Anonymous]

Following, I am in the same shoes as yours! 

[Anonymous]

I think the best option would be to repost this in the FICO score section because they people there have tons of information and data points on how a new student loan might affect you. Be prepared to give more information so they can give you a better answer. You clearly have a good start with some credit cards that will give you some good credit history and will be increasing your credit mix.
I can help you with the student loan though...what is your plan to pay it off? Standard repayment and pay in full? PSLF? Income-driven plans with loan forgiveness? Did you know that you can actually waive the in school deferment now and start making "payments" now? This is a very helpful option if you're doing an Income-driven plan as the "payments" will count but can very well likely be $0/ month if your income is low while in school!
Just something to think about. Hope this helps. :-)

[Anonymous]

Thanks Sabil,

Regarding re-payment, I haven't selected an option yet; I just signed the docs a couple of weeks ago, and received notification of my assigned loan servicer last week.  

I will be paying as I go, before graduation, to decrease the amount of debt accumulation.

Any advice is appreciated.

[Anonymous]

Regarding loan forgiveness, income based payment, etc. Is there a guide or document that explains the stipulations?  

I am working full time, and have returned to school to advance my career. I may not be considered low income for repayment purposes, as I don't know what the income parameters are for qualification.

[Anonymous]

Yes, here are some good resources:
Repayment plans explained, including the 4 different income-driven repayment plans that have loan forgiveness. There are also other loan forgiveness programs like P(ublic)S(ervice)LF.
https://studentaid.ed.gov/sa/repay-loans/understand/plans
And here is the repayment calculator. It takes into account interest, income (but not income changes such as loss of job and it adds an automatic annual raise that most people don't get). Imo used as a guide rather than exact amounts.
Income-driven plans are not for everyone in that if you will have an income above a certain point you may pay off the loan before forgiveness. But I don't think you actually no longer qualify until you have a higher income so see if it makes sense for your numbers. If you won't have anything forgiveness, I would pay down the loan more aggressively to pay less interest. You have a great plan already, it will help you the most if you decide how you will likely pay it before you need to decide your plan to pay even while in school. Also, if you want to pay while in school I think you have to turn in an in-school deferment. I would break the periods up. I think you can turn them in any time but you can only change your mind once.
https://studentloans.gov/myDirectLoan/mobile/repayment/repaymentEstimator.action

[Anonymous]

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@Anonymous wrote:

Hi All,

I have accepted student loans for the upcoming semester, and have zero experience. What impact can I expect on my report/fico8/9 when the loan starts reporting?

Currently, I have several cc, but no installment accounts.

It is a Fed Stafford loan, if that matters.

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I just had my fed loan (grad) disburse yesterday and my credit score on TU from credit.com shows a drop of 25 points.

[Anonymous]

GeePee: Sorry, I meant to say in-school deferment waiver. You have to sign a waiver to be able to have your payments count while you're in school. I would do it by semester or year so you Don't used up your one "undo" that you get. I did that when I was half-time recently.
Regrading PSLF I just read today that you actually do need to be on an IDR payment for the majority of the repayment. I think there is an IDR plan that you only qualify for if you don't qualify for anything else. Your payments are much higher but then I think they max out at no more than you would pay on the standard repayment plan. Something like that, you'd have to check on the student aid site.
The repayment calculator would also be somewhat accurate in estimating your monthly payments per plan too.

dhi: wow, sorry that this happened to you. One positive if that as your accounts age, you maintain a low credit card utilization and a positive payment history your score will go back up.

[Anonymous]

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@Anonymous wrote:
GeePee: Sorry, I meant to say in-school deferment waiver. You have to sign a waiver to be able to have your payments count while you're in school. I would do it by semester or year so you Don't used up your one "undo" that you get. I did that when I was half-time recently.
Regrading PSLF I just read today that you actually do need to be on an IDR payment for the majority of the repayment. I think there is an IDR plan that you only qualify for if you don't qualify for anything else. Your payments are much higher but then I think they max out at no more than you would pay on the standard repayment plan. Something like that, you'd have to check on the student aid site.
The repayment calculator would also be somewhat accurate in estimating your monthly payments per plan too.

dhi: wow, sorry that this happened to you. One positive if that as your accounts age, you maintain a low credit card utilization and a positive payment history your score will go back up.

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@Anonymous That's true, PS my credit.com monitoring site already predicts that my scores are going to go up by 18 points by 5th September, so its not so bad. End of the day technically only losing 7 points on average for this first disbursed loan. 

[polaris2011]

I finally have some data to share. My son's student loan reported to TU yesterday and my FICO 8 increased by 21 pts. Prior to this loan, I had no installment accounts on any of my reports only CCs (6 accts, 5 open and 1 recently closed). TU is my youngest and cleanest report, meaning it does not report my 10+ year old car loans closed in good standing that both EX and EQ report. I suspect I might see a small increase to no impact or a small decrease on the other reports when and if the installment loan gets reported to them.

Good luck!