Quote:
Originally posted by onetime2
I'm no expert on how they determine credit score (there are others on the board who apparently are) but I do know people that were turned down for loans because they did not have sufficient credit histories despite the fact that they paid their debt off quickly whenever they developed it. They also had a tendency to pay for things (like cars) in cash and it seemed to hurt them. It was almost like they were just beginning in the world of finance despite being in their 30's and living a very comfortable life. It seem that sometimes having no significant history of paying things off over time hurts since the credit companies can't predict how you will be at it.
Just my .02.
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Yep, exactly right. You are basically comparing apples and oranges here mrblue. If you decide to keep the student loan, you shouldn't do it to build credit. Keep it because you feel more comfortable with the cash, because you can make a higher rate than you are paying, or because you like the tax consequences.
However, if you are looking strictly into building credit, I would suggest charging some things on your card(s) each month and paying the balance off in full. Do not charge higher than 50% of your credit limits, though. Another option would be to take out a secured loan or an automobile loan. You'll pay a bit in interest, but it very well might save you much more money on more expensive purchases down the line.
Credit Reporting agencies like to see people with no to low debt, as long as they are still utilizing credit. The people that scare them are the people that either don't currently or never have had companies lend them money. Credit history is merely the habits of paying back money, the longer the history, the better the score.