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SlimT
New Member

Building credit with a Student Loan?

Hi everyone,

 

I already have above average credit and am comfortable paying off the entirety of my tuition this semester without loans. I'm wondering if taking out another unsubsidized loan and paying it off in full will be a good idea to build credit over the long run. TurboIntuit says creditors like seeing a mix of loans and credit cards, but it also says they like to see the average age of loans to be long, so I'm wondering which of these effects will net a positive increase in my credit health in the long run.

 

Thanks in advance!!

Slim

2 Replies
tagteam
Level 15

Building credit with a Student Loan?


@SlimT wrote:

I'm wondering if taking out another unsubsidized loan and paying it off in full will be a good idea to build credit over the long run.


The folks at Experian believe that to be the case (see the link below). However, if you already have above average credit, you might be better off just continuing to pay any current loan installments and your other bills in a timely fashion rather than adding new debt.

 

See https://www.experian.com/blogs/ask-experian/do-student-loans-help-build-credit/

katiewitt711
Returning Member

Building credit with a Student Loan?

As the previous person said, I wouldn't add new credit lines if you have established credit. I would pay down your current loans, as the balance decreases, your score should increase. I would also suggest limiting the amount of accounts you open in a short period of time. 

 

Determine your oldest credit card, and never close that account.

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