Student Loan Over 100%

[Queen_Etherea]

Ok so I have a really old student loan that I basically never paid. I was able to rehab the loan and have had on time payments for the past almost 3 years. The original amount was for $2,500, but because of interest and time, the total came to around $6,000. I've paid it down to about $3,800, but it's obviously still above 100% the amount. 

So my question:  Is having the loan at over 100% hurting my score? Do you think my score will go up once I pay it down below the 100% line? I know I should get a little bump once I've paid it down significantly more, but what about getting it at like 95%? 

Thanks!

[dynamicvb]

I've always been curious about this too. Don't really know the answer, but do have a similar situation.

[calyx]

I believe the general consensus is that installment loan utilization does not have the impact that revolvers do (on your FICO scoring).
Having a student loan over 100% isn't going to matter much.

What matters is when your aggregate loan utilization is below 9% - you'll get a nice scoring bump.

While it's all profile dependent, I can say I didn't see any significant movement (that couldn't be easily attributed to something else) paying my student loan from >100% to 74% 

[Queen_Etherea]

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@calyx wrote:

I believe the general consensus is that installment loan utilization does not have the impact that revolvers do (on your FICO scoring).
Having a student loan over 100% isn't going to matter much.

What matters is when your aggregate loan utilization is below 9% - you'll get a nice scoring bump.

While it's all profile dependent, I can say I didn't see any significant movement paying my student loan from >100% to 74% 

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This is exactly what I was looking for! Thank you very much! 

[calyx]

Happy to help!

And just to make it even more fun (and confusing) at any given time, I'll have bureaus list the installment loan amounts/paydown as both a "negative" and "positive" factor at the same time.  

[Anonymous]

I asked a similar question. I was curious as to how my high utilization student loans were affecting my score.
The answer I got from the folks here was that it's not stopping an ideal profile from being over 800. I think they said it was probably only ~30 points.
This makes sense because my current score is with the multiple >100% util loans and a 90 day late. Our profiles look very similar too.

If you have any lates left from before the default, that's costing you more points. You could try disputing them to try to get them removed.

[ibebarrett]

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@Queen_Etherea wrote:

Ok so I have a really old student loan that I basically never paid. I was able to rehab the loan and have had on time payments for the past almost 3 years. The original amount was for $2,500, but because of interest and time, the total came to around $6,000. I've paid it down to about $3,800, but it's obviously still above 100% the amount. 

So my question:  Is having the loan at over 100% hurting my score? Do you think my score will go up once I pay it down below the 100% line? I know I should get a little bump once I've paid it down significantly more, but what about getting it at like 95%? 

Thanks!

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So I was in a situation where my student loans were collectively at ~106% of the original principal, I made a lumpsum payment to bring it down to 95% and didn't see a single point difference. I think you'd have to bring the balance down by at least 2k to start seeing score gains.

Hope this helps!

[Anonymous]

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@calyx wrote:

And just to make it even more fun (and confusing) at any given time, I'll have bureaus list the installment loan amounts/paydown as both a "negative" and "positive" factor at the same time.  

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Just a FYI positive reason codes have no bearing at all on Fico scores, just negative ones... so any "positive" factor that you're being shown is just fluff and doesn't be viewed as something that's increasing a Fico score.

[Anonymous]

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@Queen_Etherea wrote:

So my question:  Is having the loan at over 100% hurting my score?

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Nope, it isn't.  Anything over a certain threshold (say) 88.9% is going to be viewed as maxed out, so going above that isn't going to make a difference with respect to Fico scoring.  The only way this could adversely impact you is if you had another installment loan that was of similar/greater value and it was significantly paid down already... meaning your aggregate loan utilization was a good bit (threshold crossing) lower than this individual loan.  In a situation like that, the numerator (amount owed) on this student loan if it exceeded the denominator would also adversely impact aggregate installment loan utilization, which if it crossed a threshold could result in a (not too significant) loss. 

[calyx]

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@Anonymous wrote:

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@calyx wrote:

And just to make it even more fun (and confusing) at any given time, I'll have bureaus list the installment loan amounts/paydown as both a "negative" and "positive" factor at the same time.  

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Just a FYI positive reason codes have no bearing at all on Fico scores, just negative ones... so any "positive" factor that you're being shown is just fluff and doesn't be viewed as something that's increasing a Fico score.

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Oh, absolutely, but it can still give me a giggle