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Freaking out, Student Loans account have officially opened

Freaking out, Student Loans account have officially opened

Hello all, so I'm 22 years old and also a recent college graduate (Dec 2021'). As of today, it looks like on my Experian app that my student loans have OFFICLALLY went from closed to open on my account. Well I'm freaking out now because my total debt went from freaking $6700 (I have auto loan & 2 collection Accts) to freaking $32,059. My credit usage was also at 1% but now it may sky rocket and drop my credit score :'(. 

Someone please help, why did this all of a sudden open? [The Government] extended the student loans until August this year. 

Will this affect my credit usage like increasing it? & will my credit score be tremendously affected? 

What should I do???? 

also to edit: I have 1 cc (capital one platinum secured credit limit $400 only used $3/$400 reporting) and my uncle has me as an authorized user on one of his old credit cards (credit limit is $6100 and it's reporting $0/$6100) being used Which puts my usage at that 1% mark.  

5 REPLIES 5
TheRedHat
Regular Contributor

Re: Freaking out, Student Loans account have officially opened

A lot to unpack here, but since no one has answered yet...

 

Your credit score is not (mostly) dependent on the amount of debt that you are carrying. If nothing else has changed other than the new loan reporting, then your credit usage will continue to be 1%, as that is based on your revolving credit and not installment loans which is a separate category. Since it is a new account, however, your score may drop slightly due to your age of accounts, but that will go back up over time.

 

Someone else with more knowledge about the student loan being open now instead of closed can chime-in on that, but I wanted to let you know not to panic about the credit score portion. 

Last updated: 6/7/2022

FICO 8

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Message 2 of 6

Re: Freaking out, Student Loans account have officially opened

Thank you so much, I was freaking out! I'm not sure if they finally opened because I graduated or what. Normally when you're in college they remain closed until graduation. I'm just really hoping everything is okay though! Thanks again for the reassurance! 

Message 3 of 6

Re: Freaking out, Student Loans account have officially opened

Should I be concerned?

 

So, I was working with a credit specialist for about a month. I cancelled working with her simply for the fact that she was trying to delay my process of my credit report to get more money each month. Long story short, I graduated college in December. As we know, the SL account stays closed while you're in college and opens when you finally graduate. I'm not sure if it just finally opened or if she tried to dispute the accounts. 

I basically am on my credit karma account and it shows "Remark removed from account" and below the paragraph they have under that, it just says the name of the SL company. Why did this happen? Did she try and dispute the account? Or is this just something random??? 

Message 4 of 6
Tylo
Member

Re: Freaking out, Student Loans account have officially opened

I'm just finishing school so those loans just get bigger. Smiley Happy The student loans will be in a deffered state while you are in school so there will be nothing due. They are just there, not really helping or hurting your credit much. Each year when a new one opens, you may notice a small decrease in score as it is lowering your average age of accounts but I found this to be negligible. FICO also places some weight in the percentage of paid off loan balances, so this may affect it slightly.

 

I wouldn't worry about it much, as a large part of us have student loans on our accounts. As long as you pay them on time when you are out, it will only help you in the long run. 

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FICO 8 Scores:05/2016 (TU 492, EX 483, EQ 466) 04/2022 (TU 689, EX 663, EQ 683)
Message 5 of 6
teekay45
New Member

Re: Freaking out, Student Loans account have officially opened

All of my student loans are listed as open and have been regardless of them being on pause since COVID began.  I believe they opened since you are six months out of college as that is usually when the grace period ends.  It does not mean that you owe anything or are accuring interest at the moment since they are still on pause.

Message 6 of 6
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