I recently paid off a $16k balance on a four-year-old private (non-federal, non-subsidized) student loan. The loan has had flawless payment history. I still have installment loans open for my auto loan and a personal unsecured loan through my bank. My credit has a few black streaks on it from old debts that are about to fall off the 7-year cliff. Any thoughts on how this might impact my FICO? On one hand, it's the loss of a major loan with long-term steady payment. On the other hand, it's removing $16k of (current) debt from my credit report.
It shouldn't have much of an effect on your FICO scores, since student loans usually don't report a CL and they're not included in your CU ratio either. Of course, you're now $16K less in debt, which is a great thing, and it certainly shouldn't hurt your credit scores in any way.
That's what I figured. It really isn't utilization at all, but it's a good chunk of liability / monthly obligation removed. Still, even if I pick up 5 points ... 5 points is 5 points!
