Will paying off my loans hurt or help my score?

[Egaffne2]

I have 2 student loans that were just recently rehabilitated in the last couple months. They are 90% paid and in good standing. The original loans date all the way back to 2009 so these accounts are helping my AAOAs. The monthly payments are low so I can keep these open for awhile if I want or I can pay them off very quickly too because there is not a lot left.

What's the best choice for helping my score? I know ideally paying of loans is good but at the same time these are my only open installment loans. These also are old accounts so that helps too. Being that the interest is low should I keep these open for as long as possible or pay them of quickly.

[silver_idle]

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@Egaffne2 wrote:
I have 2 student loans that were just recently rehabilitated in the last couple months. They are 90% paid and in good standing. The original loans date all the way back to 2009 so these accounts are helping my AAOAs. The monthly payments are low so I can keep these open for awhile if I want or I can pay them off very quickly too because there is not a lot left.

What's the best choice for helping my score? I know ideally paying of loans is good but at the same time these are my only open installment loans. These also are old accounts so that helps too. Being that the interest is low should I keep these open for as long as possible or pay them of quickly.

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Paying them off will help your score since it would bring the overall debt balance down, but you might take a very small ding on the score once it pays off and the account closes but shouldnt be that big of a difference.

[Anonymous]

I paid off one of my vehicle loans last month and it finally reported today and I took a small 6 point loss but a gain on other Fico scores (like mortgage score and bank card scores all increased) .

It all depends if you will still have an installment loan reporting or not and your individual portfolio. 

[Egaffne2]

That's the thing, these are my only open installment loans. I don't have any auto, mortgage or personal loans. And as I mentioned before they are 10 years old so they help my AAOAs. They are low interest too and the balances are small so I'm thinking I might wanna drag these out which is easy cause the payments are low.

[Anonymous]

I'd keep them as long as I could because your score will take a loss once they are closed. Not sure if there is any way to keep them on your report as paid in full once they have been . .. that would help but honestly. .. im sure you'll be happy to be done with them finally. ... I know I would be. calculate they interest and weigh that in with the time you could spread the payments out. Congrats and good luck.

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@Egaffne2 wrote:
I have 2 student loans that were just recently rehabilitated in the last couple months. They are 90% paid and in good standing. The original loans date all the way back to 2009 so these accounts are helping my AAOAs. The monthly payments are low so I can keep these open for awhile if I want or I can pay them off very quickly too because there is not a lot left.

What's the best choice for helping my score? I know ideally paying of loans is good but at the same time these are my only open installment loans. These also are old accounts so that helps too. Being that the interest is low should I keep these open for as long as possible or pay them of quickly.

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[calyx]

I'd drag it out.    It's easier than having to do the whole "SSL" technique if you want to satisfy the open installment loan, especially if you can keep it at under 9% for a long time.

I'm hoping to get my student loans down and keep them for a long time as well. My interest is also low (3.8) and I won't mind spending the pennies to keep longer lines open.

[Egaffne2]

So under 9% huh? They are around 90% so I'll bring them down a tiny bit and hold on to them for awhile. Thanks for the advice!

[FireMedic1]

For best FICO scoring. You only need 1 loan reporting. The oldest keep open as long as possible. As they pass 89, 69, 49, 29, 9% are the % thresholds. Scores go up.

[FireMedic1]

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@silver_idle wrote:

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@Egaffne2 wrote:
I have 2 student loans that were just recently rehabilitated in the last couple months. They are 90% paid and in good standing. The original loans date all the way back to 2009 so these accounts are helping my AAOAs. The monthly payments are low so I can keep these open for awhile if I want or I can pay them off very quickly too because there is not a lot left.

What's the best choice for helping my score? I know ideally paying of loans is good but at the same time these are my only open installment loans. These also are old accounts so that helps too. Being that the interest is low should I keep these open for as long as possible or pay them of quickly.

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Paying them off will help your score since it would bring the overall debt balance down, but you might take a very small ding on the score once it pays off and the account closes but shouldnt be that big of a difference.

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Having no loans at all reporting. In most cases FICO can wack you with 15-30 pts depending on individual files. 

[SouthJamaica]

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@Egaffne2 wrote:
I have 2 student loans that were just recently rehabilitated in the last couple months. They are 90% paid and in good standing. The original loans date all the way back to 2009 so these accounts are helping my AAOAs.

Closing them would not affect your average age of accounts until they drop off your credit reports, which could be many years down the road.

The monthly payments are low so I can keep these open for awhile if I want or I can pay them off very quickly too because there is not a lot left.

If you keep them open with a small balance that will help your FICO 8 and 9 scores, and might have some slightly positive effect on your mortgage scores.

What's the best choice for helping my score? I know ideally paying of loans is good but at the same time these are my only open installment loans. These also are old accounts so that helps too. Being that the interest is low should I keep these open for as long as possible or pay them of quickly.

In terms of your FICO 8 and FICO 9 scores, keep them open as long as possible.  

But bear in mind that FICO scores aren't everything. Sometimes it's just nice to get something paid off

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