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Building credit. Should I pay off my student loans all at once, or leave a chunk? What's the best?
Career / 6:44 AM - Wednesday December 02, 2009

Building credit. Should I pay off my student loans all at once, or leave a chunk? What's the best?

If I want to build up my credit using my student loans, what's the best way?

I have about 7k in student loans at a really low interest rate, but have enough money to pay it all off. What's the best way to build up my credit history?

I don't have the greatest credit, as I have very little credit and was late a couple of times with small credit card payments (disorganization) and once I refused to pay a $25 phone charge I didn't agree with. I am worried about my credit history now though, as I can't even get a credit card now.

What would be the best way to build my credit up with this student loan? It costs me about $180 a year to keep the $7,000 debt, which isn't so bad.

Can I pay 6k of it and just leave the remaining 1,000 of the loan open to make it continue to count positively, or should I go about it differently?

Update: December 02, 2009.
I need to build my credit. I can fix the interest rate at about 2%, and we have no other debt. In the end, it only really costs me about 1% considering interest on our savings. The problem is that I really need to build my credit, because at this point I can't even get a store credit card.

- Asked by milla, A Thinker, Female, 36-45

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It's best to set them up for automatic payment.

The longer time you make on time payments will increase your credit history the most.

While paying it off in full feels great, it doesn't help your credit score in the long run.

- Response by utahmom, A Thinker, Female, 56-65, Managerial

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Since the interest is so low and you have no other debt, I'd just keep making the payments.

Be sure you're never, ever late! If you could set up an automatic payment plan, that would be good.

You need a history of timely payments to offset the late ones.



- Response by mamom04, A Sweet Sarah, Female, 56-65, Phoenix

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i would pay towards any other debt since the rates for education loans are usually really low.

if there is no other debt, then pay it off. why be in debt, especially in this uncertain economy.

- Response by boggob, A Guy Critical, Male, 29-35, Political / Government

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Pay it off. That's what I did. Then you have a history of repayment.

So how is your baby doing?

- Response by llafsroh, An Intellectual Guy, Male, 46-55, Boston, Science / Engineering

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I think it is always best to get the loans payed off as soon as possible

- Response by bigcurt, A Mr. Nice Guy, Male, 56-65, Pittsburgh, Self-Employed

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Well am going to try not to preach but if you can pay it off great but you have a small baby and that by it self costs fortune if something God forbid happens.

As for store or Credit Cards NO NO NO bad bad bad idea i know sometime you just have to have credit but people get so .... and ruin their lives by those cards and their leeching companies.

Its no easy choice and there is no easy answer here i wish i could help more ...


- Response by shygirl1979, A Career Woman, Female, 22-25, Who Cares?

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