Student Loan Debt vs. Credit Card Debt. Which Impacts Credit Scores More? – Episode #64
October 16, 2008 by awjolls
Filed under Episodes, Student Credit Scores
Student Loan Debt vs. Credit Card Debt
Which impacts your credit score more? Answer: Student loan debt impacts your score less than credit card debt because installment debt hurts less than revolving debt.
- Student loans are an example of installment debt
- Credit cards are example of revolving debt.
You want to make sure that if you’re going to apply some accelerated payments, that you put these against your credit cards first. You want to lower the amounts owed on credit cards and then go after student loans. One more thing, while there are differences between these types of debts when it comes your credit score, in terms of your debt to income ratio which is a common ratio lenders use to make a decision about you, there isn’t a difference. They basically add up all your debt — your credit card debt plus your student loan debt — and make a decision on what your ratio looks like.
Student Loan Shopping and Credit Scores – Episode #63
October 15, 2008 by awjolls
Filed under Episodes, Student Credit Scores
Today’s topic is student loans shopping and credit scores and the question is does shopping for a student loan impact your credit score? The answer to this is that it really depends… some financial institutions report this to the credit bureaus when you’re shopping around and some do not and this is challenging because trying to figure out which ones do and don’t is a little tricky and to make matters worse you also have to worry about the fact that the inquiry rule that with mortgages when you can apply for mortgages and any mortgage application in a 30 day window is really just counted as one inquiry unfortunately does not apply to student loan shopping so you have to really get a great credit score before you decide to go out and get your student loans. This really matters even more when you are looking at private student loans. Yet, another good reason to get your FICO credit score.
