I was wondering about my student loans and how they affected my available credit to usage ratios. Does anyone know how this works? I was wondering if they considered it maxed out, because they might use the loan amount as the credit limit and the balance, which means you are at 100% utilization. Is this how it works or does FICO treat student loans as a different animal. Sirrowan
OOOhhh, Good question!! My husband is a student and I never thought of this! I do know that when he changed schools this spring, the student loan is viewed as a new account! His previous loans did not have this affect. Hopefully someone knows the answer to your question
Unfortunately, I think the answer to this is yes they do affect your ratios. At least they have in my case. I recently paid off all my credit cards to $0 balances, with the appropriate limits being reported and still my scores are in the low to mid 600's with only 1 10 month old 30 day late showing. However, I have a few student loans have a current balance higher than the original due to forebearances its possible that this is the real issue keeping my score down. I just consolidated those loans, and will be curious to see how my score changes once the reporting changes.
A 10 month old 30 day late WILL lower your score. Guaranteed. How old are your cc's? As for loans, unless it is a revolving loc, does not get figured into your ratios as far as credit scores go.
On Friday I completed consolidation of my student loans. I disputed the old tradelines, showing greater current balance than original one. Today I checked my report and my score has gone up, and the "BALANCE TO LIMIT RATIO" reason has disappeared. ****************************************** Yes, I know the 10 month old 30 day late will lower my scores....but it's easy enough to figure out the effect of that by disputing and checking my score afterwards. AND that is the third reason given by FICO - the first being balance to limit ratio - and most of my cc's are 0 balance, the two w/balances are not near the limit. Limits are being reported on all cc's. My cc's are not new. I'm definitely interested to hear if anyone else with student loans in this situation had similar or different experiences.
So you diputed the balances on your old student loans that were closed/paid off? Did these accounts show that they were closed on your credit report before you disputed? I'm thinking that when collection agencies say that you owe more than your credit limit, or when a debt is charged off and it shows that your balance is more than your credit limit, that, in addition to the R9 code kills your scores. Am I making sense?
Before I disputed the individual student loans they were showing as open accounts, but with current balances higher than original balances. I disputed them in order to get them updated to closed/paid accounts ASAP, instead of waiting for Sallie Mae's regular reporting. I'm not sure I totally understand your point about collection accounts - but *I believe* that all current balances (except for mortgage accounts which are listed as such) and all limit/high balance/original balance (whatever they decide to call it) info is used to calculate your ratio. This seemed to be happening in my case, YMMV.
