Unsubsidized Student Borrower Loans: Repayment while in school

DavidPuddy
Mon, 30 Apr 2018 15:01:26 +0000

Generally true statements and good advice @twoinanddone . Of particular importance is the utilization caveat that you highlighted. It is one of the pillars of positive credit scores.

I am … well versed on the algorithms Fair Isaac uses, in so much as anyone is, given their proprietary nature. I can tell you with certainty, establishing a non revolving loan tradeline early will have a positive effect on score down the line. Even if the tradeline is not in repayment, it’s origination date will (eventually) contribute to average credit age, and potentially oldest account. Certainly, high utilization while it is new is a net negative if you care about that snapshot in time. But the benefits of the age, the mix of credit types, and the potential to pay the utilization way down well before graduation are all net positives. It is important to have a good mix of credit types for maximum scoring potential, that includes revolving credit and installment credit.

All of that is of course moot if you extend beyond what you can pay … and then don’t pay. That’s the most important criteria of all.