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Posted in Student Loans
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lg5913

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How does paying off a student loan affect my credit score?
My student loan is about to be discharged due to disability. The loan payments have never been late, but have been deferred. The loan is just over 9 years old. I only have one other account and it is a credit card that has only been open a little over a year. The credit card balance was paid on time when there was a balance, but generally I paid in full. Currently there is nothing owed. I am afraid that when my student loan debt goes away that my FICO score will plummet. I think that because the length of my credit history will then only be one year because I will only have one open account. Is this true. Is my FICO about to go down? Every other factor in my credit report is good to excellent.

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I wouldn't be worrying about the possible drop in score due to the foregiveness of the student loans because of disability.  You can build your score gradually by use of consumer loans and additional credit cards.  That is what I did, slowly, and I now have a score that allowed me to finance a new car, which wasn't possible five years ago. The age of my accounts is low, but all other factors are good to excellent.

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