Congratulations! Paying off your student loans is a great accomplishment. If you always made your student loan payments on time, you may not see a big increase in your scores as a result of paying them off.
A paid off loan means you no longer owe that debt, and does reflect positively on your credit scores over time. It also means you have more disposable income, which can help you qualify for new credit in the future. While income information is not part of your credit report, lenders will usually ask you to provide your income as part of the application process.
Student loans, along with home mortgages and auto loans, are considered installment loans. An installment loan generally has a starting balance that's repaid over time with a fixed number of payments. Paying off student loans or any other installment loans will reflect positively in your credit report, especially if they were always paid on time.
Once paid off and closed, positive accounts can remain on your credit history for up to 10 years, giving you credit for your good payment history.
More information on how student loans affect credit can be found on the Ask Experian blog.
Check out the scope to hear answers to all the questions asked:
Do you have questions about credit?
Join our live video chat every Tuesday and Thursday at 3:00 p.m. ET on Periscope. Rod Griffin, Director of Public Education at Experian, is available to answer your questions live.
Scoped on: 2/23/2017