Hey guys, just a quick question. I am still in college and currently have approximately $22,000 in student loan debt. I get financial aid, but not enough to cover tuition, books, and such, so I need more loan money. I have been approved for more, but don't know how this will affect my score. It has already dropped almost 50 points since March, and don't want it to go down more. For this school year, I need about $10,000 more and next year about half of that. I guess what my question is, is, if student loans are in deferment and your balance goes up, does that affect your score? Thanks in advance. ***Forgot to spell check, sorry!!!***
I have 60,000 in student loan debt. I have had the loans in and out of deferment. The deferment itself never affected my score. It is the same when I am making payments as when it is deferred. As far as balances go, I have no idea.
Well its really a mystery isn't it? I've never seen/heard anything about how specifically student loans are treated by FICO. My situation is that I haven't had any new loans - just unsubsidized loans that continue to accrue interest while in deferrment. So what happens to me is that my original amount is lower than my current amount owed. I'm about 70 percent sure this is affecting my score. If you can believe what you see on creditexpert (and I"m not sure that you can) those figures are all lumped together when figuring out the balance to limit ratio which *does* affect FICO
Ny student loans have also been accruing interest. But that interest seems like pocket change when compared to a $10,000 increase in balance. I just don't know what's going to happen. I want to better my credit, but when I need this money, and it affects my score, how can I? Never-ending cycle, I guess.
Are you still a student or in deferrment? The wisest thing would be to pay that accruing interest now. When the loan enters repayment, any accruing interest becomes principal and then you pay interest on the interest!
I'd be paying the deferrment interest as I go if I could.... Erica - You should check the actual Fair Isaac site for their explanation of what factors count for FICO scores - I don't recall that the total amount that you owe is part of that except in how it relates to the ratio of the total amount you owe vs. the total amount of credit you have available. If you add $10k in credit available, and have $10K used - it all washes out so it shouldn't matter to your score except htat it will be a new account and will have an affect on your "average length of time of accounts" FICO factor. The time when the debt to INCOME ration really matters is when trying to get a mortgage....the good news there however is that deferred student loans don't count in this calculation
It has been discussed here and at other credit sites that student loans DO NOT help or hurt your scores unless they default or you are late of course....OR until you pay them off almost....about 50% paid off or more. They are treated neutrally as far as FICO goes. I dont know anymore than anyone else on the matter. All I know is what I read. This information comes from this site and creditinfocenter. I hope this helps. ERica...take out that loan if you need it.....
