Student loans, payment, and credit

[Cream Soda]

Alright, I'm due to graduate next semester and the past few semesters, I've been taking out student loans, but only spending grant money and leaving the loan money in another account.

The goal was pretty much to use the money I borrowed to repay the loan and help build some credit.

There's a 6 month period after I graduate before interest starts to accumulate.

What's the best way to make payments to build credit? Can I do this in large payments over the 6 months or is there no avoiding making payments over time and letting at least some interest accumulate?

I'm just proud of myself that I could go Summer, fall, and now spring w/o touching a cent of this money; and while I should have done some research to see if I can even do anything for my credit with this, worst case scenario is I give it all back to them immediately and nothing happens, so eh.

Any tips/suggestions?

[Blubbartron]

Pay off 80% of them, then make minimum payments until it's paid off. There's no reason to let interest capitalize/accrue on a huge loan and just have money sitting in an account. Unless, of course, your interest rate is stupid low, and you're capable of investing all that capital with an expected return far above the interest rate. Using a loan to make money is how the big dogs do it, until they have their own phat bankroll and can skip the middlemen.

[Meresgi]

Loan me the money so I can pay off my own student loans. that's probably your best option here.

[RKenshin]

If credit score is your main concern, redirect your focus into getting any kind of credit card you can (if you haven't already). Just about anyone can qualify for something, whether it has to be with a $500 limit or one of those weird prepaid ones, something is better than nothing.

But something silly like 3/4ths of your credit score comes down to your history on rotating accounts (credit cards, home equity), with the remaining portion being installment accounts (student loans, car loans, mortgage).

That aside, I'd probably agree with what Blubbatron said:

Pay off 80% of them, then make minimum payments until it's paid off. There's no reason to let interest capitalize/accrue on a huge loan and just have money sitting in an account.

[Cream Soda]

I have two as it is.

An amazon card and a bank of america card.

The BOA card has a balance right now of about 200, with auto payments of 25 every month. Once it gets close to being paid off, I may make another purchase.

The amazon card has high interest, so I simply use it for amazon purchases, then pay in full on the date the minimum is due. I've missed one payment by 18 minutes -.- due to a lab report that was due at the same time as the payment (that I thought was due the next day; and that teacher doesn't take late shit, so yea). Paid it, but just was 18 minutes late

[RKenshin]

OK, do your best to keep the total balance of your cards < 20% of the total available credit limit.

Most of the time, late payments on a credit card are only reported to the credit score bureaus if they're more than 30 days late, iirc.

[Nesssie]

What are your goals in terms of credit? Are you planning to buy a car this year or next year? Are you planning to buy a house within a year or in the next five years? If you don't plan on making any kind of large purchases any time soon, just keep doing what you're doing and pay on time. I say pay off your student loans because paying interest if can be avoided is a bad financial move. The best move you can make is have a long history of on time payments on credit cards. The student loans will stay on your credit report for 10 years after you pay it off. That will help with your average age of accounts which needs to be high for a better score.

Utilization is important but that can be manipulated when you are ready to buy. You can pay down your cards so that your utilization is less than 10% or 20% of your total credit limit when you want to buy a car or a house.

[Cream Soda]

Just trying to establish some sort of credit in general. The 2 cards I opened were within the past 2-3 months.

Aside from that, idk if it counts, but the only other thing I have anything even in my name for is an unpaid ER visit from eons ago (another reason why I'll have to be unconscious for you to get me into a hospital room now and why I didn't go the last time I got hit by a car lol; still licking my asshole to get the taste of this other bill out of my mouth)

[Mojo]

The unpaid ER thing will only affect you if it went to collections and you didn't pay.

For good credit, they look for multiple sources of revolving debt with good history. Student loans are a source for that, but only once source. You definitely don't want the interest to kill you. I would advise paying them all off as soon as you can and use other means (credit cards, lines of credit, etc.) as your sources of revolving debt. You should be able to get around 6~ sources of revolving debt via two credit unions/banks, which is what they look for if you are wanting to buy a house.

[Cream Soda]

The unpaid ER thing will only affect you if it went to collections and you didn't pay.

I'll assume this to be the case as I haven't paid and it's been years.

Hell, fuckers didn't even do anything. Went in there because for about a week+ I had severe stomach pains, got about 2hrs of sleep a night, was hard to lay still, yet alone move or do anything. Got to the ER; waited about 3 hrs, then got put in a bed to wait for the doctor. The guy came and poked my stomach with 2 fingers; told me to take some tylenol and gave me a bill for $1000+; the pain persisted for another week or so before it went away and the guy was in the room with me for less than 5 minutes.

Paying that shit was never even an option; fuck that bullshit

[Nesssie]

Check your credit reports at least once a year at annualcreditreport.com (make sure the site says authorized by federal law - you'll know you're in the right site) Collections will stay on your report for 7 years from the time the account became delinquent. Check your state's statute of limitation regarding written contracts. When your medical debt is past the SOL, you'll know that you should not get sued for it. If they try, you can definitely stop it. I'm not suggesting people should avoid their debt but people should know their rights as well regarding debt.

[archibaldcrane]

creditkarma.com is also a great way to keep tabs on your credit situation. It only tracks one of the 3 bureaus but you can update it whenever you like, and it's 100% free.

[Blubbartron]

creditkarma.com is also a great way to keep tabs on your credit situation. It only tracks one of the 3 bureaus but you can update it whenever you like, and it's 100% free.

Only updates *at most* once per week now, so it's not as good for monitoring potential identity theft anymore, but it's still quite useful for tracking score and the things affecting your score (from that one bureau).

[Meresgi]

I'll assume this to be the case as I haven't paid and it's been years.

Define "years". If it's been some time dont even worry about it anymore. I owed an electrical company up in NY and cable company like $2,000 combined, but that was awhile go and they stopped even attempting to collect on it anymore. Its been pushed off my credit report. Actually did a credit check and found i'm like 1 point off from an "A" rating somehow. Going to chalk that up to paying off my credit card a year ago.

I also owe the Art Institute like $1200 but I refuse to pay it due to how it went down and why they are billing me, luckily the limitations in Maryland are far more forgiving then NY.

[Dryr]

medical and student debt doesn't effect credit much...

your loans cost you 3-6% minimum, depending on when you got them...

minimum payments on auto pay are not beneficial...

Just buy everything on a card and pay off every month. You will have 800 credit score in a couple years...

[Cream Soda]

Define "years". If it's been some time dont even worry about it anymore. I owed an electrical company up in NY and cable company like $2,000 combined, but that was awhile go and they stopped even attempting to collect on it anymore. Its been pushed off my credit report. Actually did a credit check and found i'm like 1 point off from an "A" rating somehow. Going to chalk that up to paying off my credit card a year ago.

I also owe the Art Institute like $1200 but I refuse to pay it due to how it went down and why they are billing me, luckily the limitations in Maryland are far more forgiving then NY.

medical and student debt doesn't effect credit much...

your loans cost you 3-6% minimum, depending on when you got them...

minimum payments on auto pay are not beneficial...

Just buy everything on a card and pay off every month. You will have 800 credit score in a couple years...

Noted, thanks

Define "years". If it's been some time dont even worry about it anymore. I owed an electrical company up in NY and cable company like $2,000 combined, but that was awhile go and they stopped even attempting to collect on it anymore. Its been pushed off my credit report. Actually did a credit check and found i'm like 1 point off from an "A" rating somehow. Going to chalk that up to paying off my credit card a year ago.

I also owe the Art Institute like $1200 but I refuse to pay it due to how it went down and why they are billing me, luckily the limitations in Maryland are far more forgiving then NY.

3 at minimum, likely 4-6 though



Also, I have another question while I'm here. How does credit carry over if let's say I move? I may potentially take a short-mid length residence (or maybe perma if I can get citizenship) in South Korea. I graduate next semester and it's on my list of potential options (Pharmacy school being first, teaching English in Korea being second; followed by masters or PHD program in biological sciences, finding a job with my bachelor's in biology, joining the military).

If I go to Korea for let's say 5 years; would my credit score remain the same when I return, even if I have no US credit history for the entire time I'm gone; because honestly, it may be the most likely scenario since Pharmacy school is pretty damn competitive and getting in is not too likely for me.

[archibaldcrane]

It wouldn't stay the same, bu if you don't cancel your CCs you will still have some measure of credit when you return. Don’t know what overseas stuff is considered though.

[Therin]

How long will your stay in Korea be? If it's like a 6 month or 1 year work visa just get a US card that functions internationally and work on your credit while you're there.

[Viq]

From my experience, credit in the States and in Korea are entirely separate entities. Also, if you aren't using any of your CCs back home while you are abroad, your credit rating will dip a bit. It wasn't a ton for me, but it was enough that I use my American credit card for lunch like once a week, and pay that bill off immediately when it comes. That's been enough for my credit rating to just stay the same since I started doing it.

[Cream Soda]

Hey Viq, any recommended text books or aids to help get familiar with the language? I don't expect to have a PhD in Korean, but would like to have at least some foundation so I'm not learning from scratch when I go there. If I'm there long enough, I do plan on becoming fluent.