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Posted in Student Loans
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court91

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Can paying a student loan off early negatively effect your credit score?
I want to build my credit score and I am trying to figure out if I pay off my entire student loan if it will have a positive impact on my credit score and raise it. Please help if you can.

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I would agree with Todd, that if your student loans are the only items on your credit report, paying them off in full may hurt your credit score. How much -- and for how long -- the negative impact lasts will depend on how many other credit accounts you have on your report and how old they are. 

As an example, when I was about 26 I paid off a car loan early. I had a mix of a few student loans and several credit cards, so I didn't think twice about the possibiltiy paying off the loan would affect my credit. Low and behold, my score dropped 30 points. It did come back within a few months, though. 

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