Paying off student loans early- hurt or help?

[babsbunny]

30% of your credit score is your debt to credit ratio. Pay it off.

While I have not heard it applied to loans, I can assure you that the rumor that it helps your credit score to keep a balance on a credit card instead of paying it off each month is completely false.

Your credit score definitely will not go down by paying off the loan.

[Susie]

I would make the decision based on your overall financial picture and not based on what minimal impact it will have on your credit score. At 2% I would let it ride.

[AAM2012]

Mar 30, 2015 21:24:20 GMT -5 Susie said:

I would make the decision based on your overall financial picture and not based on what minimal impact it will have on your credit score. At 2% I would let it ride.

This.

What else is going on in your financial picture? At 2% I likely wouldn't pay it off early.

[madisen]

A 740 credit score is generally top tier already. Are you planning on taking a loan out any time soon or financing a car where you want to protect your credit score in the short term? As long as you have at least one older credit line or credit card paying off your student loan should help more than hurt. As someone else said debt to income will look better anyway.

[AAM2012]

Mar 30, 2015 21:53:02 GMT -5 madisen said:

A 740 credit score is generally top tier already. Are you planning on taking a loan out any time soon or financing a car where you want to protect your credit score in the short term? As long as you have at least one older credit line or credit card paying off your student loan should help more than hurt. As someone else said debt to income will look better anyway.

I am not sure 740 is considered top tier as when I recently applied for a mortgage they told me anything over 780-800+ is considered excellent.

OP, I would focus on saving for a downpayment and making sure you both pay your bills on time.

If it makes you feel better you could round your payment up but I wouldn't focus on paying off the SL.

Edit: not that 740 is "bad" but improvement of your score will allow you to get a better mortgage rate when the time comes.

[crashgizmo]

Mar 30, 2015 22:42:26 GMT -5 @bigreddog said:

Mar 30, 2015 22:32:01 GMT -5 AAM2012 said:

I am not sure 740 is considered top tier as when I recently applied for a mortgage they told me anything over 780-800+ is considered excellent.

OP, I would focus on saving for a downpayment and making sure you both pay your bills on time.

If it makes you feel better you could round your payment up but I wouldn't focus on paying off the SL.

Edit: not that 740 is "bad" but improvement of your score will allow you to get a better mortgage rate when the time comes.

My score is being brought down because I have "too few" accounts. It's the only area that is considered poor on my rating. All of my bills are paid on time. The age of my accounts are good (10 years). I don't have anything in collections or negative hits.

Any ideas on the best way to bring my score up in this area? It is recommended to have at least 11 accounts. I have a few credit cards, but not an extensive number. Should I add myself to my husband's credit cards? His score is in a similar range of 740-750. 

I did this when DH and I got married, and because he is 9 years older it helped my credit quite a bit (age of accounts). I don't think it hurts to do this, but I'm not an expert. 

[madisen]

Mar 30, 2015 22:23:18 GMT -5 @bigreddog said:

Mar 30, 2015 21:53:02 GMT -5 madisen said:

A 740 credit score is generally top tier already. Are you planning on taking a loan out any time soon or financing a car where you want to protect your credit score in the short term? As long as you have at least one older credit line or credit card paying off your student loan should help more than hurt. As someone else said debt to income will look better anyway.

Is it top tier? I was always under the impression 740 is really the border between ok and good. That's why I'm paying attention this year since we are planning to buy a house in the next year. I want to stay at or above 740. 

Yes, ideally you want to be at or above 740. But even if there is a momentary dip in your credit score (which i don't think will happen merely from paying off a student loan) you have time to move it back up to 740 before you're ready to buy.

[madisen]

Mar 30, 2015 22:32:01 GMT -5 AAM2012 said:

Mar 30, 2015 21:53:02 GMT -5 madisen said:

A 740 credit score is generally top tier already. Are you planning on taking a loan out any time soon or financing a car where you want to protect your credit score in the short term? As long as you have at least one older credit line or credit card paying off your student loan should help more than hurt. As someone else said debt to income will look better anyway.

I am not sure 740 is considered top tier as when I recently applied for a mortgage they told me anything over 780-800+ is considered excellent.

OP, I would focus on saving for a downpayment and making sure you both pay your bills on time.

If it makes you feel better you could round your payment up but I wouldn't focus on paying off the SL.

Edit: not that 740 is "bad" but improvement of your score will allow you to get a better mortgage rate when the time comes.

I run secondary for a mtg company and I can assure you that for regular conventional and fha loans all of our investors (so in turn we) price the highest traunch at >= 740 credit score. It's not likely to get a better rate for 800 vs 740 unless you're getting a jumbo loan. Yes, 780-800+ is excellent but not better priced.

[glynn]

I would pay it off to be done if I had the cash. I like the little things.....

[wambam]

Non-MM-regular anecdote: my MIL "bought" my student loan so that I pay her rather than the original loan holder. (She had her money in a CD and my interest rate was CRAZY so it benefited us both financially). Paying it off did not impact my credit score at all.

[Deleted]

Thanks for posting this! My SL is down to $1600ish and I pay $100/month, so I've been wondering the same thing.