I have a question about the timing of paying of debt and its affect on my credit score. I have the ability to fully payoff my final student loan (5.4% interest) by June and I will payoff my car in November. At that point I will have no debit other than my credit cards I pay off monthly. Those are all good things, but I might look to buy a condo spring 2025.
My question stems from last time I paid off a student loan in aug 2023 my credit score took a 20 point hit that it still hasn’t recovered from down to the 790-800 range. So what is the most efficient way to pay off my student loans that will be the least impactful on my credit score? Or will my credit recover by next year holding all else equal. Should I
- pay off my loan as planned in June
- pay them both off in November. Is there any advantage to grouping them together?
- Pay down my student loan, but leave enough left to last me until next Summer at the minimum payment Also live in the US .
original posted by diddybopp to r/personalfinance on Tue, 05 Mar 2024 05:17:14 GMT.