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John Ulzheimer, Smartcredit.com president of Consumer Education, breaks down the myths and facts on how student loans affect credit.
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Know this if your student or a parent.
So here to answer some common myths about how student loans affect your credit score -- by John Alzheimer president of consumer education for smart credit dot com.
John great to have you here and I want to talk to you about dad is.
Unbelievable -- that students carry.
27200.
Dollars on average work students just this year and I'm sure it's gonna get worse where you see that going.
All well it's not going to do anything but don't hiring between we talk about how -- countries in fourteen plus trillion dollars worth of debt.
But we don't talk a whole lot about the fact that we as consumers have over 800.
Billion.
Dollars in aggregate student loan debt which is now higher than what we know on credit card debt and you're right that -- that latest vintage.
Graduates that -- -- just this past spring are about to fall outside that six month Pitt -- window and they're gonna start getting the statements in the mail order to start have to pay out.
There are there are coming due and the next couple of months and get ready forum.
-- nobody likes to hear -- okay so.
What's interesting to me about this segment is that there's so many minutes around this because these kids -- much doubt.
And in some cases they don't have a job maybe they have a low paying job here's one of these things the people believe that paying student loans early.
Hurt your credit score because banks want the full amount as interest -- you don't pay it off early.
Yeah hold onto it because it's gonna hurt your credit score otherwise is that true.
I'm quite certain that -- came out of the banking industry.
That is absolutely not true you can pay your student loan off in one -- tomorrow if you can.
And you're not gonna penalize your credit score -- all the banks don't control.
Your credit score what goes on your credit report is -- -- -- fact that you Catalonia that your making the payment what the payment was what the balance was.
And what the remaining balance is and that is it if you pay early they don't get all the interest that is not something that goes on a credit report -- cannot in.
Wants to score.
Our rates so it doesn't matter of -- them -- -- that stuff matters at that's not what they're that's not what -- -- you on our right.
-- will consolidating student loans help -- hurt your credit score doesn't matter.
That's actually a good one that actually can help your -- here -- A lot of these student loan servicers and lenders report to the credit reporting agencies on a disbursement by disbursement basis so if you take it out.
Three loans per year or two loans per year for the duration of your college education you might actually have that.
Ten or twelve loans showing up on your credit report that's not necessarily a good thing even though they're probably all being paid on time or even still -- deferment right now.
If you can consolidate down.
Then -- will likely report -- the credit reporting agencies as just one allowing -- which is actually much better for your credit sports also much more convenient richer when writing one check every month vs multiple checks.
And it's a win win because when you consolidate usually refinancing I don't at a better interest -- -- while.
John good stuff you know these kids really worry about the credit scores may they should think more about getting the job and paying the debt down.
-- hits for the help the day.
