Student loan and credit score

Discussing family accounts as a way to establish credit, it is said that people who start up usually use student loans as their first credit account unless they get a car loan or credit card with a family member with a credit history. Student loans are a tricky area for installing credit records because they are not as beneficial as you might think.

You may think that opening a student loan account when you first go to college will show the history of that account, but in fact, the student loan is counted as a "credit payment history" only when you start the first payment. Most student loans are deferred as long as you are at school. Once you are out of school, you have one to four months, and the company begins asking you to pay monthly to repay the principal and interest.

However, when you have a student loan, you have "arrears". Depending on this amount, you may actually lower your credit score. On the one hand, you feel that the payment will increase your score, but you will be fined for the amount owed.

So what reasonable student loan debt do you have? Do you want to pay it off immediately?

According to people like Stephen Snyder and Robert Kiyosaki, if you have a student loan debt, you want to use it as the last item you paid off. It comes down to the IRS strategy. The history of this strategy has been exhausted as student loans have become a necessary condition for people to go to college. The moment the US Internal Revenue Service allows you to use student loan interest as a deduction is the moment when this strategy is generated.

How does this work?

• When you pay your new account, the interest you pay each month will pay your interest.
• When you submit a tax, you will be asked to enter the amount of student loan interest you paid.
• The amount paid is the deduction.
• During the same period, you only need to pay "arrears" to reduce your total debt.
• You are also paying, as long as they are on time and full monthly, you can help you get the score.
• When you reach a certain point in the loan, you barely pay any interest on the balance and pay off the debt.

Summary

The student loan, when you first start taking it out, will appear in your credit report, but there is no payment history. It's just an open installation account. Lack of payment history will not help your score and will not harm it. On the other hand, debt utilization can hurt your score. This is because having this debt makes your score slightly lower than you have no debt at all.

If this is your only debt, then it is also considered "rare or no debt" and this does not help when you try to get a new loan to build your credit history.

When paying a student loan company as part of an installment agreement, you need to pay the required amount on a monthly basis. If possible, pay more than the monthly amount.

Paying interest can help reduce your tax arrears. You want this deduction and payment history. Deduction may be the only way you can help you get a refund. As the balance drops, the payment history can also help you increase your score.

There will be a little when you have to pay your debts in full. Do this when deducting taxes is no longer important. At this point, reducing debts will also help. The reason behind this key point is the other credit you have built. You should be in your 30s or 40s with mortgages, credit cards and other credits, which is more important for your ability to get credit. You no longer need a payment history for student loans. In fact, considering the amount of debt you may have at this time, you want to reduce the overall "arrears".

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