Your credit score is the single most important thing that affects the amount of interest you pay. People with credit scores over 750 pay much less interest than people with scores below 650. If you can raise your credit score by 100 points, you'll pay less interest, be able to pay more toward the principal, and get out of debt faster. Who gets richer and who gets poorer in this country has a lot to do with their credit score.
The secret about credit scores that not many people know.
Student loans you took out to pay for college can have a big effect on your credit score. That small monthly payment could be causing you to pay more interest on all of your other bills, which is hurting your financial health as a whole.
When you have a loan of any kind, it tells you how much you can borrow, how much you still owe, and what your payment history is. The total amount of balances is taken into account in the credit score. The score drops the more you owe.
You think things are easy, right? Surprise, it's not.
Student loans almost always show up three times on your credit report. So, even if you only owe $15,000, your credit score is calculated as if you owed $45,000. This can make a big difference in how much interest you have to pay.
Even worse, your loan could look to Sallie Mae like 7 loans. Then multiply those 7 by 3, and your credit report could say "21 Student Loans." Most people don't know that this can hurt their credit score, but it can. They work hard and pay their bills on time as much as they can. But computers mess up their student loan balances, so they don't get the credit score they deserve.
Only a small number of experts know how this works.
And most people don't want to know. They just buy your credit score, put the interest rate on your loan, and move on to the next person. You need to work with a professional who knows how credit score computers work on the inside. They are the only ones who can help you pay off your student loans and get the interest rates you deserve.
