| Credit score is an important indicator on the credit | | | | borrowers clear the loan fast. It may sound unfair |
| worthiness for a person. A person who has a score | | | | because you have the right to pay off the loan as |
| higher than 750 will enjoy much lower interest rate if | | | | quickly as possible, but it is a fact. Generally, your |
| compares to a person who has a score below 650. | | | | credit score will be lower by 10 to 15 points just |
| Therefore, increasing your credit score by 100 points | | | | because you pay off the loan sooner. However, it is |
| will save you thousands of dollars in paying on | | | | not a bad thing to start paying the loan once you are |
| interest. | | | | afforded to pay it because it saves you thousands |
| You have the responsibility to keep your credit rating | | | | of dollars on interest. Sadly, it is the fact you have to |
| as high as possible, but before that you have to | | | | know: paying off the student loan fast does not help |
| understand the causes that have negative impact on | | | | in your credit score; instead it gives negative impact |
| your credit score. One of them is student loan. Below | | | | to lower your score. |
| are some commonly unknown facts about how a | | | | 3. Loans with too long repayment period lower credit |
| student loan can potentially reduce your credit rating. | | | | score |
| 1. Student loans are reported in triplicate | | | | Student loans with repayment period longer than 10 |
| One of the variances in credit score computation is | | | | years will lower your credit rating because it will be |
| the outstanding balance, the more you owe, the | | | | reported as "too long to pay off a debt" in your |
| lower the score. In most cases, student loans will be | | | | credit report. As the repayment period is one of the |
| reported in triplicate in your credit report, meanings | | | | factors in credit score computation, your score will be |
| that if you borrow $20,000 of loan, your credit score | | | | affected if you take up a loan with long repayment |
| will be calculated based on $60,000 of debt. This will | | | | period. |
| not only greatly lower your credit rating, but also | | | | Anyone who plans to take student loan from Sallie |
| impact on the amount of interest you need to pay. | | | | Mae need to aware that one loan from Sallie Mae will |
| Most people never know about this fact. They just | | | | be considered as 7 different loans in credit report. |
| try their best to pay off the loan on time, but due to | | | | Since the student loans in most cases are being |
| the loan is reported triplicate, they don't get the | | | | reported in triplicate, it will look like you have |
| score they deserve. So, it is better to explore for | | | | borrowed 21 loans and your credit score will be badly |
| other funding resources before you decide to take | | | | impacted. |
| student loan. | | | | Summary |
| 2. You score low in credit rating if you pay off the | | | | Student loans give negative impact to your credit |
| loan fast | | | | rating and low your credit score. It is better to |
| Lenders don't like their borrowers to pay off their | | | | explore other funding resources to aid your study. |
| student loan faster as they earn less interest if the | | | | |