Bad credit score due to a stupid situation

[Dr panda]

Hi folks. So, I got into a really sh*tty and weird situation. Though I am (relatively) far from applying to med schools and for graduate loans I am getting worried about my credit score. I always was a good borrower, paid all my cars way before end of the loans, never missed payments, always paid bills on time, etc.
However, I was able to pull some good money by the end of the year and decided to start making payments toward my undergrad federal student loans. I had around ~8k of debt and made a 2k payment last week. What an idiot. I just got email from capital one telling me that because of the payment my credit score dropped by 80 points! I had no idea that I should not make payments toward federal undergrad student loans while in school. I don’t think I could make those 80 points back within reasonable time because I don’t want to get any new loans in upcoming future. Does anyone have any advice? I will definitely talk to my financial aid office about this. But I am unable to do right now.
Thanks.

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[deleted1011020]

Hi folks. So, I got into a really sh*tty and weird situation. Though I am (relatively) far from applying to med schools and for graduate loans I am getting worried about my credit score. I always was a good borrower, paid all my cars way before end of the loans, never missed payments, always paid bills on time, etc.
However, I was able to pull some good money by the end of the year and decided to start making payments toward my undergrad federal student loans. I have around ~8k of debt and made a 2k payment last week. What an idiot. I just got email from capital one telling me that because of the payment my credit score dropped by 80 points! I had no idea that I should not make payments toward federal undergrad student loans while in school. I don’t think I could make those 80 points back within reasonable time because I don’t want to get any new loans in upcoming future. Does anyone have any advice? I will definitely talk to my financial aid office about this. But I am unable to do right now.
Thanks.

So yes it does hurt your score to pay outside of the terms of of your loan, in the short term.

To boost your score, what ive done is get my parents with fantastic credit scores to put extensions on their lines and then just throw 10% on it then pay it off.

I did the same thing as you, paid off the only ~2k loan before hand and it nuked my score by like 100 points.

Let me know if you have any questions and the like, I love talking finance and its something ive been trying to learn about.

I went from 620s to 730s this way. I also have credit cards with extremely low balances that I have solely to build credit.

 

[IlDestriero]

You don’t need stellar credit for a student loan. You do need to be remotely credit worthy though. Maybe skip the bankruptcy. Many students probably have a horrible credit score because they have little or no credit history at all. Don’t overthink it.

 

[Dr panda]

So yes it does hurt your score to pay outside of the terms of of your loan, in the short term.

To boost your score, what ive done is get my parents with fantastic credit scores to put extensions on their lines and then just throw 10% on it then pay it off.

I did the same thing as you, paid off the only ~2k loan before hand and it nuked my score by like 100 points.

Let me know if you have any questions and the like, I love talking finance and its something ive been trying to learn about.

I went from 620s to 730s this way. I also have credit cards with extremely low balances that I have solely to build credit.

Hi thank you for the advice! The funniest thing is... I am a finance major

 

[Dr panda]

You don’t need stellar credit for a student loan. You do need to be remotely credit worthy though. Maybe skip the bankruptcy. Many students probably have a horrible credit score because they have little or no credit history at all. Don’t overthink it.

I had a good score 700+ that went down to 630+ which is average. Your post made me feel better.

 

[clinicallabguy]

That is infuriating that paying ahead on federal student loans would lead to a drop in FICO score. That really confuses me, though. Because I thought these were the metrics and relative weights that determined the FICO score:

Do you get a demerit in the payment history section of your score if you make unscheduled payments? If so, then that's just messed up. I guess that you should wait to snowball your student loans until you're in a situation where you do not need to take out further loans. But it sounds like you already figured that one out.