Will cutting a student loan in half increase my credit score quicker?

Discussion in 'Credit Talk' started by antofants, May 4, 2017.

  1. antofants

    antofants New Member

    New and looking for advice. Screwed my credit score but being delinquent for several months on an old student loan. I've started making payments on it again but was wondering if it would benefit my credit score quicker to cut the loan in half with some of my savings (the loan is $3,200). I could pay it off outright, but I've read that it would actually cause my credit score to drop for a period. I'm in the process of looking for a mortgage to move by the end of the summer.

    I'm hoping I have the right forum but if I don't I would appreciate if someone might be able to direct me otherwise.

  2. JoshuaHeckathorn

    JoshuaHeckathorn Administrator

    Welcome and sorry for the delayed reply. Sorry to hear about the late payments too and the ding your FICOs took. For a smaller balance student loan like this one, I would keep it in place and keep paying on time for the boost to your FICOs. If you pay it off and don't have any other installment loans on your credit report, you could actually see a decrease in your FICOs while you're shopping the market for your mortgage. Hope that helps!

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