Paying off student loans early and credit score
Q: How does paying off student loans early affect credit score? I have 3 loans, initially for close to $22,000. I have been paying them down, now only about $7,200. One student loan has only $1,000 in debt and I am thinking of paying it off in February. Here are three questions I have,
first, will going from 3 loans to 2 affect my credit score?
second, will paying off early hurt my credit score?
third, once paid off, will these student loans drop off my credit report?
I am getting conflicting answers from my friends. My credit history is very limited, just these student loans and Kohl's credit card with $400 limit. I was denied twice for credit cards in the last 2 months. I would like to get out of student loan debt as early as possible without hurting my scores.
A: Paying off your student debt in full early will not hurt your credit score in any way. If you can pay off those loans as soon as you can and forget about them. Once you pay off one loan the account should be closed by the lender shortly. It will not affect your credit in any way, negatively I mean. All closed accounts stay on the credit report for approximately 10 years, never mind if paid as agreed or early. The fact that closed accounts are staying is a good thing, as they increase average age of accounts on your report and credit length history. See Paying off student loan - few tips on how to reduce your student loan debt.
Thu Jan 6, 2011 10:01PM | Copyright: www.bad-credit-advisor.com | More in Student Loans | Comments (0)
Recent Entries
- Capital One Secured Credit Card to Improve Credit Score - Review
- How to get approved for mortgage - loan approval help
- Spouse average FICO credit score is higher?
- Why average credit score?
- Getting mortgage after bankruptcy - go FHA
- Debt settlement and how it affects credit score
- Debt settlement with Citibank
- Can I settle with credit card company with no late payments?
- Credit card limit lowered, credit score goes down
- Gold price will rise in 2011
