 TITLE: Will Paying Off My Student Loans Affect My Credit Score? CONTENT: What Happens to Your Credit After Paying Off Student Loans?\n-----------------------------------------------------------\nTo understand how paying off a student loan might affect your credit, it may help to consider how student loans can impact your credit throughout their lifecycle.\nStudent loans appear on your credit report as installment loans. These are loans that have a set dollar amount and a predetermined number of monthly payments, similar to a car loan. Adding an installment loan to any revolving credit card accounts you may have can improve your credit \"mix,\" or types of credit you manage, which is a factor in calculating your credit score.\nWhen you begin repaying your loan, your payments are reported to the credit bureaus. As long as your payments are on time, they contribute positively to your payment history—and, in turn, to your credit score. Late payments, collections or defaults also appear in your credit history and have a negative effect on your score. By the time you make that final loan payment, much of your student loan's credit story has already been written during the years you've been managing and repaying this debt.\nSo what happens when you pay off your loan? Paying off the loan in full looks good on your credit history, but it may not have a dramatic impact on your credit score.\nWhen you make your final loan payment, the account status on your credit report will be updated to \"paid\" (insert massive sigh of relief here). You may see a temporary dip in your score from the change to your credit report, especially if your student loan was your only installment loan or if your remaining loans or credit cards have high balances. You may also see a small increase after making your last on-time payment. Or you may also see no change at all. There is no set rule for how a final loan payment will affect your credit score—but in most cases, any effect is usually temporary.\nIf your score decreased after your last student loan payment, it will likely bounce back within a few months as long as there are no other negative issues in your credit history and you continue to make all your other debt payments on time. Your positive payment history on the account will remain part of your credit report for up to 10 years and will thus have some positive impact on your credit for years to come. If you had any negative items—late payments or collections, for example—these will stay on your credit report for seven years from the date of the original delinquency, at which point they will drop off. END