Ok, my credit isn't as bad as it was, but I've had so many deletions that all that's left on my reports (except Experian, ugh, but that's another story) is 1 account "closed by consumer" and two whopping tradelines for student loans - I enter repayment in July.... So now... I'm not about to screw up and pay late - but I really want to pay these loans off, quickly... (7500.00 hanging over my head) I don't make a lot of money, but I can handle paying about 200 a month...(vs. paying 59 a month) But how will this look to creditors? What is the most "credit-worthy" way to pay off these student loans, since the payoff will be really the only way I will re-establish my credit? Any advice, credit score gurus? Thanks in advance.... ;-)
My folks always taught me, neither borrower nor lender be. Since I've made decent money over the years I've just paid for the stuff I've wanted. Consequently my reports are rather "skinny", especially since I spent 7 years living in Europe. I bought a car last weekend for the Foxy Mrs. Butch. A Grand Prix, fully loaded, but I digress. Who wants to have a car payment to worry about, she said. I do. So we started a bank account from which the monthly payment will be deducted 10 days ahead, AUTOMATICALLY. I threw enough money in there to make the payments for at least the next year. I can: Be sure the pmts. are made on time without my personal effort Make interest on the money that sits in the account and thus "offset" the interest I'm being charged Build more and better credit over a longer period of time Have the separate account into which I can feed money, through the top, in advance, while the pmts. are being deducted from the bottom. Imagine a funnel Once you know that there's enough in the account to service the entire loan, technically the loan is paid for, (debt service) even though the loan is actually still active. Just make sure you don't touch it. Creditors are more impressed with a long, consistent, TIMELY payment history than they are with a shorter, more aggressive payoff. By paying loans off early you actually save yourself interest but the OC doesn't like that. Whatever it saves you it costs them. There's no car history on my report so we got 7.25%, as opposed to 4.5 or so. But the point is that's still not too bad, even with a skinny file. Much better to have a skinny report without negatives.
