Best way to build credit and pay off student loans?

My wife has very little credit and about $25,000 in student loans. We have the cash to pay it off, but I wanted to know the best way to build her credit while doing so. Can she boost her credit by keeping at least some of the loan balance and making regular, on-time payments? Will it hurt her that the balance of the loan is a good bit higher than her overall credit limit ~$5,000?

Best way to build credit and pay off student loans?

PIGGYBACKING: Despite its' virtually

unlimited potential, piggybacking is

not used by nearly as many consumers as

it should be. It's easy, effective,

and extremely fast. Unfortunately,

it's mostly used among parents and

siblings while those who can really

benefit stay in the dark.

How it works. Almost every credit

card or credit account will allow the

primary account holder to add on (at a

later date) what's known as an

%26quot;Authorized User%26quot; or %26quot;Secondary Account

Holder%26quot;. In most cases, when this is

done, the entire account history

(retroactively) gets posted to the

authorized users credit report

regardless of their current age or

credit history!

For example. If it's a credit card

with a $10,000 limit which has been

paid as agreed for the last 10 years,

then that complete history will be

posted to the authorized users' credit

report. I once saw a clients' credit

report who used this technique with his

mother. He was only 24 at the time and

he had a $15,000 Gold credit card on

his report with history going back 11

years! I laughed as I thought to

myself that this kid would have had to

be approved when he was 13 years old

for this account to be his!

As you can see, this strategy is

usually only used by parents and their

children and in most cases with no

regard to the benefits the children are

reaping credit wise! In fact, in

recent years, due to its'

effectiveness, this technique has led

individuals with excellent credit

scores to %26quot;rent out%26quot; authorized user

accounts on one or even multiple credit

cards in return for a fee! I once

recall seeing an ad in USA TODAY for

just such an opportunity. Like most

good credit loopholes, I'm sure this

methods' days are numbered much like

what may be the case with...

Terry Price is the founder of Consumer

Education Group which publishes the

Credit Secrets Bible (in print since

1994).

For more information on the CREDIT

SECRETS BIBLE you may visit:

http://gaby1221.niesong.hop.clickbank.ne...

Best way to build credit and pay off student loans?

The balance of her student loans doesn't exceed her credit limit because the loans are not a open line of credit they are a loan. If she has missed payments in the past, That will ding her credit score.

Building credit is a long and drawn out process. If she locked in her student loan rates when the rates where low then paying off the loan doesn't make sense. If her rates are high, then paying off the loan makes more sense.

There are a lot of factors to a credit score. % of available credit is one of them, that I think you are asking about. This percentage factors the level of revolving credit, it doesn't include car loans, mortgages and thinks like that becuase they're not lines of credit they're term loans.

Best way to build credit and pay off student loans?

The interest on student loans is tax deductible. Usually the deduction isn't worth as much as you pay in interest, but if it is, perhaps paying off the loan over time, but at an accelerated pace is best.

Otherwise consider how much money you can earn on on the $25,000. If it is more than you are paying in interest on the loan, keep the loan. Otherwise pay it off and be rid of it.

Paying your bills is an important factor in your credit score. Prepaying your bills should have little effect one way or another.

Your score is based on the percentage of your available credit that you use, the length of time you have had credit relationships, your repayment history and whether you are applying for a lot of new credit.

Your score will increase rapidly if you behave responsibily.

Best way to build credit and pay off student loans?

If your wife is trying to build her credit she would not want to completely pay off one of the oldest accounts she has. This would close a line of credit that she has had for years and can actually hurt her credit. The best plan would be what you mentioned in paying off much of the loan but keeping a balance. If she makes her payments on time every month that will definitely help her credit score. She may want to look into consolidation if she has not already done so. That will combine all her loans into one and help her debt to income ratio. That would also give her more options regarding repayment to make sure she never misses one.

you can also visit www.studentaidlending.com for more info