Credit Advice

Have a question? Have advice to share? The combined knowledge and experience of everyone in the Credit Karma community can help you. Enter your question or help others below to get started!

Question

Posted in Student Loans
Profile Image

Question By
DAluv1988

0 Contributions
0 People Helped
paying off loans
Over the past few years, I have been slowly paying off my student loan debt. This would appear to be good for my credit score, yes?
However, when I recently paid off one of my smaller loans, my score went down instead of up because paying off the loan subsequently "closed an account." I understand the logic behind this, since this technically effects the age of my credit line history, and that it is recommended to keep older credit lines active (or at least open) in order to have a positive effect my score. I have only one more loan to pay off, which is the largest one. It will be at least 2-3 more years until I can comfortably pay it off. Is there any way I can avoid the negative effect that paying this off would have on my score? ...or are loan servicing companies obligated to close loan accounts once they are paid off, therefore reporting it to the credit bureaus?

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW
All Responses

Result 1-1 of 1Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next
Top Contributor
7816 Contributions
1485 People Helped

They have to close them when you pay them off. Nothing you can really do there. What you can do is make sure that you have other open accounts so the damage isn't so bad. Start tracking your FICO scores from time to time too.

Result 1-1 of 1Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW

Reply to this Question

Write your response:
Enter Your Comments

The Credit Advice pages of the Site may contain messages submitted by users over whom Credit Karma has no control. Credit Karma cannot guarantee the accuracy, integrity or quality of any such messages. Some users may post messages that are misleading, untrue or offensive. You must bear all risk associated with your use of the Credit Advice pages and should not rely on messages in making (or refraining from making) any specific financial or other decisions.