can student loans help CR?

Discussion in 'Credit Talk' started by doodyhead, Nov 20, 2001.

  1. doodyhead

    doodyhead Well-Known Member

    Just wondering, will student loans help my fico scores?

    I have the opportunity to go back to school & get tuition reimbursement from my company - I am thinking of taking out the federal student loans, then paying them with the reimbursements
  2. roni

    roni Well-Known Member

    The unofficial answer is NO. Student loans do not help your overall credit file until they are almost paid off. They are a insignificant factor in the major scheme of credit scoring and I think that is because so many people have them. OF course if you are late or default then they hold the negatives against you........ironic
  3. Erica

    Erica Well-Known Member

    I respectfully disagree with roni. I can see where she is coming from, but my student loans show up as installment loans in good standing. I can't see how that WOULDN'T help your scores.

    I'm not an expert or anything, so take this with a grain of salt.
  4. roni

    roni Well-Known Member

    My student loans show up as "in good standing" as well.....but that is besides the point.

    My information comes from a 'credit expert' - Christi commenting on this topic 1.5 years ago on a credit repair message board.

    That person stated what I posted and I was just sharing the information.

    But, you feel you loans are helping your scores, you are certainly welcomed to think so.
  5. roni

    roni Well-Known Member

    please note tha I am referring to credit SCORES and not overall credit rating.

    Let me give you an example, back when I was repairing credit, I disputed my 11 defaulted student loans and got my 11 charge offs changed to paid never late.

    WOW! You would expect my credit score to sore. I mean I got 11 defaults changed to perfect installment loans....NOT

    My score rose only a little. The rise was due to some negatives coming off and it definitely didnt reflect 11 positive instant loans over 10 years old being added to my file.

    What's your take on that.....Erica. or anyone interested.
  6. fla-tan

    fla-tan Well-Known Member

    Student loans can impact upon your credit score. Computer programs that score credit are not able to differentiate between types of installment loans. And student loans show up as installment loans. All a computer can see is that there are multiple installment loans of the same type and this can and usually does cause a negative impact on your credit score. This is one of the reasons that most mortgage lenders at least prefer that you consolidate your student loans when going to buy a house as consolidating will raise your fico score.

    Hope this helps

  7. KHM

    KHM Well-Known Member

    I have lowered my payment on my student loan (the lower pmt expires X it shows paid never late. On TU it's under adverse accounts with the creditors note "under partial payment plan". I called the creditor and they said I have never been late and they don't understand this. I called TU and they said some lenders think it's adverse cause it looks like I can't afford to pay the full amount.
    My question is I only owe $550, but I noticed everyone is always saying keep things open for at least 2 years, it will be 2 years in Feb. should I just stick it out or would it help if I pay off now? The 2 year rule does that refer to credit cards or everything?
  8. PsychDoc

    PsychDoc Well-Known Member

    Well I respectfully disagree with roni as well, and I've got the real-life example in my case to prove it. I had a Citibank student loan that was listed as a default ("PIF by guarantor") since 1999. However when the guarantor -- Illinois Student Assistance Corporation (ISAC) -- presented me with my options upon default they never discussed my right to rehabilitate the loan. So like a fool I simply paid it off IN FULL (thinking that would help my record, lol) -- the week after it defaulted. Jump ahead two years to July (4 months ago). I spoke with the Department of Educations chief ombudsman, Debra Wiley, who got in touch with Citibank; their "senior paralegal" for student loans looked over the ISAC materials that I forwarded and decided that indeed I should have been presented with the rehabilitation option as well. On that basis, she changed the tradeline to "paid, never late" in the CRA files (but not in the NSLDS database which still reflects a paid default). My CreditExpert (Experian) score jumped 28 points. (I didn't track the impact on Equifax since I hadn't yet subscribed to Score Power, nor did I know the impact on Trans Union.) Moreover, when my PHEAA and First TN loans (all late-pays, 120 and 150 days) were updated to "paid, not late" following the Creditwrench and CRA lawsuits respectively, my Equifax scores jumped considerably. Although there were other non-student loan tradelines involved as well (so it's harder to tease out the impact of the student loans by themselves), my FICO jumped from 632 to 712 (current).


    P.S. If anyone needs Debra Wiley's or the Citibank paralegal's contact information, email me through the board. For information regarding the Creditwrench influence on the PHEAA (and MBNA, for that matter) tradelines, do a board search for my posts on keywords "PHEAA Creditwrench". Finally, I'll post a lawsuit summary after I'm completely finished with all three CRAs.
  9. fingrrrl

    fingrrrl Well-Known Member

    I wonder if there is a difference in your score based on what the loan reports as. My one student loan, money directly from the government, is stated as never late in last 18 months since update. My other loan, directly from my school, is called never late, student loan not yet in repayment. I wonder if the first one impacts my score negatively more so than the other because it doesn't state that it's not yet in repayment. Should I ask to get this changed or doesn't it matter or help my score at all?
  10. PsychDoc

    PsychDoc Well-Known Member

    Fingrrrl, in that case, I would doubt there's a hair's difference between the two.

  11. CardKid

    CardKid Well-Known Member

    I work in the auto finance industry. One of my customers had nothing but student loans and her beacon score was 725. She was instanly approved for a 16k loan and was only 20 years old with 5 trade lines...all student loans. I think they are treated as any installment loan.

  12. roni

    roni Well-Known Member


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