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
2015grad

0 Contributions
0 People Helped
When I pay off my student loans will my score go down if I don't have any other sources of credit?

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

View your scores and reports anytime.

SIGN UP NOW
All Responses

Results 1-6 of 6Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next
8 Contributions
9 People Helped
Most Helpful Response

Your Score Could Drop

Helpful to 5 out of 6 people

Your score might decrease because you no longer have any other credit and a factor in your score is credit mix. Your amount of debt will be gone which is good and bad. You don't want to have a lot of debt or a high utilization ratio, but your credit score typically benefits from having a little bit of utilization. Don't know if that makes sense lol. Don't let this deter you from paying off your loan because not having student debt with interest tacked on trumps a drop in credit score. If I were you, I would get a credit card and make small purchases on it and pay it in full each month just to have more of a credit mix and utilization even after student loans or any other installment loans are paid off (they will fall off your credit report in 7-10 years).

1 Contribution
0 People Helped

We must learn credit Variables

Enter Your Reply Credit is very tricky. If the school loans are the only and oldest it will cause the score to drop. This is why getting additional credit/mix is a good move now. Once the strudent loans fall off credit accounts, age, and positive utilization will make up for the loss of history when the school loan debt drops off. I agree with miaevt's response because I understand the variables of how credit actually works. Payment History is 35%, Credit Utilization is 30%, Length of Credit History is 15%,New credit is 10%, and Credit Mix is 10%. Once you start adding and deleting these factors it affects yours score one way or the other...

5 Contributions
3 People Helped

Helpful to 2 out of 4 people

I'm fairly certain your score would only go up, or at the very least stay the same.

Getting rid of debt should never lower your credit score.

3 Contributions
0 People Helped

OLD student loans

Since 2009 I had two late payments . . . for Pete's sake when does that drop off?  I've not had a late payment since, come on!  

Reply by
Bizeelady2012

3 Contributions
0 People Helped

I should clarify - the late payments WERE IN 2009 and no late payments since.  Sorry for any confusion.

Top Contributor

Reply by
DancesWithWords

13 Contributions
7 People Helped
Helpful to 0 out of 1 people

Seven years, sadly :-(  I've got two late-payment months (also from '09) on my reports, and they weren't even my fault -- I have two separate loans with the same company (Sallie Mae, now Navient), and for those two months, they applied BOTH payments to Account A and nothing to Account B. Because I had the payments on auto-pay, I didn't really notice until the "Hey, you're now two months late!" letters began arriving ... at which point I went ballistic on them. I've spent the last seven years trying to straighten this out, to no avail :-(  I finally just resigned myself to waiting it out ... they'll be gone by October, so not much longer now. But I feel your pain, Bizeelady!

2 Contributions
0 People Helped

7 yr

Helpful to 0 out of 1 people

7 yrs no matter what it sucks it will eventually go back up but they will always see it

1 Contribution
0 People Helped

Paid off student loan

Helpful to 0 out of 1 people

How soon does student loan to show paid off 

Results 1-6 of 6Results 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.