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Paying off student loans?

How does paying my student loans affect my credit?

  • I am trying to raise my credit.. will paying my student loans off help my credit? my finances: Store Credit Card: 300 limit / 0 balance (paid) mastercard: 400 limit / 0 balance (paid) store card: 1000 limit: 200 balance Student loans Private: 4k (have been paying minimum for 3 years) Other Student loans: 7k (have been paying for a few months) I have no utilities (included in rent.) I don't owe anyone anything else. I want to get over the 650 hump. I did have something in collections in 2007 that was paid off in 2009 and another for 300 in 2008 that was marked as a "Paid / Charge Off" even though I paid it off a month after it went into collections. My salary is around 28k a year.. what steps can I take to improve my credit? I just don't understand what to do.. if I pay off my loans will my credit go up or down?

  • Answer:

    Paying all of your debt all the time helps your credit. Owing very little and paying off fully can increase your credit score. Skipping payments damages your credit.

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paying your student loans as agreed or early does nothing for your credit as student loans are only reported when you fail to pay as agreed. to get your score up normaly I would say charge and pay your credit cards but the limits are so low they are totally useless to helping. you will need to get a personal loan and pay it Best cheapest way to establish credit is a secured bank loan pay off over 7 months and repeat until you can get an unsecured one. Each paid loan will bump you 25 or so points

Store card - pay it off in full each month. Don't ever carry balances. Other than that, nothing else you can do to improve that credit quickly. Paying off the student loans will not improve your score. Do not open any more credit, since new credit reduces scores for the first 6 months. Unethical advise. Dispute that old item on your credit report. Sometimes (not often) when an item has been paid off for a few years, the collection agency will not bother to send back a verfication and the item drops off your credit reports.

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