Student Loan Debt vs. Credit Card Debt. Which Impacts Credit Scores More?

Hi, Andy Jolls here for videocreditscore.com. Today’s question has to do with student loan debt and we’re going to look at student loan debt versus credit card debt and how those impact your credit score. So what do you think? Well, the answer is student loan debt impacts your score less than credit card debt. Once again, student loan debt impacts your score less than credit card debt and that’s because installment debt hurts less than revolving debt. And student loans are installment debt as an example and credit cards are example for revolving debt.

So you want to make sure that if you’re going to apply some accelerated payments that you do those against your credit cards first. You want to wipe your credit cards clean in terms of the amounts owed and then go after you’re your student loans. So, one more thing to remind you of, well this is true that there are differences in these types of debt when it comes to your credit score, in terms of your debt/income ratio which is a common ratio lenders use to make a decision about you, there isn’t a difference here.

So they basically add up all your debt, your credit card debt, your student loan debt and make a decision on what your ratio is. So that’s an important thing for you to remember in terms of you thinking about how you actually want to use your credit score and use your debt/income ratio to get a loan. So if you want to learn more about these other topics, you know where to come, video credit score and you can friend me up on Facebook, file me in twitter. See you soon. Remember, everyone’s situation is different. Be sure to contact a financial adviser or a credit counseling professional before making important financial decisions. This video broadcast is for educational purposes and is not a substitute for receiving personalized professional advice.