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Just finishing up my last semester and my parents are taking out two loans - a federal one and parent plus one. The reason I'm concerned is I'm vehicle shopping as we speak and I don't want my score dropping. I have two loans out now ($14,498 total). My parents are paying for my school, they'll pay them all off when I graduate. They both say that neither will impact my credit score. Are they right?
Who is being named in the loans? If they're your loans (cosigned or not with your parents), then yes, you could experience a small drop in your scores as your average age of accounts dips. It's not guaranteed, and it probably wouldn't be much, honestly.
I would also add that many auto-lenders use industry scores that consumers do not have access to, and it's anyone's guess what will happen there. Here, we just have the consumer available scores that we've (sort of) hashed out.
If your parents get a Parents PLUS loan, it will not be in your name, and will not affect your score
@Anonymous wrote:
@Calyx Can you get the federal PLUS loan and a federal student loan at the same time?
$64 million question, right? My understanding is that the Parents PLUS is for the parents, and the federal student loans are with the student. Essentially, Parents PLUS is intended to make up for any short falls if the student cannot borrow enough.
OP, can you clarify? Are they trying to take out two different loans in their own names? Or are they having you take out more federal loans which they are going to pay back and making up shortfalls with the Parents Plus that they're taking out?
Otherwise, (Direct) PLUS is also for grad and professional students and I am baffled as to what's going on here. 7% on Direct/Parents Plus - ouch.