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
studentusa

0 Contributions
0 People Helped
Paying off school loans and credit score
IF I pay off my student loans the account will be most likely closed would this reduce my score due to less amount of accounts

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
24 Contributions
24 People Helped

It won't reduce it due to less accounts. Your account total includes open and closed accounts. What it will do is potentially shorten up your average credit age if those loan accounts have been open longer than your current credit age.
If you have had the loans for 4 years, and your average credit age is 3 years, you'll likely average down when the account is closed. This could have a negative impact, but it will be relatively minimal unless you have virtually no credit whatsoever.

Top Contributor
5038 Contributions
1134 People Helped

Incorrect. It will reduce due to less accounts. Open and active accounts report on-time payments monthly, closed accounts do not. While closed accounts are not factored into age with non-fico scoring systems, FICO scoring systems DO factor in closed accounts in finding the "average age of accounts".

____________________________________________________________________________________________________

As for the OPs question, while it would cause a score ding, I would get these paid off and put in your past. You could consider adding another loan for something else before closing these, that may help, even though there would be some short term damage to come along with that. I also advise that you have a few credit cards, they carry more weight for building credit.

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.