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cleoppa

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For the best credit score, should I pay off my student loan early?
I have been paying my student loan down, about double the minimum, for several years. Recently I started paying it down in very large chunks. I have done this primarily to save on interest (sometimes as much as $100 a month!). Currently I owe about $4000 and am ready to pay it off.

I currently have two credit cards, both of which are paid in full every month, a small bank loan (that does not report to credit agencies) and no other debt. I had a short sale on a house that adversely affected my credit.

I am trying to improve my credit score. I am wondering if it would be better to 1., just pay off the student loan or 2., pay it down to about $100 and leave it. I should get a small amount of interest, but it is my understanding that my credit score will continue to raise as they send my bills for $0 due.

Any thoughts?

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Since your bank loan does not report to the CA, paying off your loan early will affect your credit.  It will take away the "Mix" of credit which is 10% of your score.  With that said, I would not pay interest for that little of a boost.  If you keep paying your credit cards on time and keeping your utilization low you will be fine.

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