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How and when would a small student loan (direct subsidized) affect your credit score?
I am new to credit, in school and trying to work on building my credit score. I recently got a credit card, which put me on the map but my score is very low because it's the only account listed. Someone said something, somewhere, about diversifying my credit and it struck me that maybe I should consider taking out a small ($5,000) direct subsidized loan from the school.

I know the interest will be covered while I am in school, and honestly, I don't need it, other than it would be nice to have on hand so that I don't have to dip into my savings that I have worked so hard to build if I have an emergency. I have enough saved now to pay off the loan immediately if I have to.

What I'm wondering is, could I take out the loan and begin paying it off while I am in school and pay it off before I graduate to avoid interest charges and if so, is there a downside to this plan that I'm not seeing?

Also, If I do find that my expenses are such that I need to make use of the loan, and I begin making payments after graduation, would my credit score be affected, negatively or positively by the loan, other than maybe a rise in score for having two accounts?

I mean, it seems like a good idea since this loan has no interest on it until graduation and it is already approved without a credit check. Then again, some people may say that I shouldn't take a loan out without having the need, no matter how small... Any thoughts would be appreciated.

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