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Comment by sirsean | Hacker News Reader

I paid mine off within about two years after graduating, but later learned that doing so wrecked my credit. (The credit score people want to see a long record of payments, not someone who quickly pays off debts in full.) I felt that it was better to pay them off NOW, rather than pay 10x as much over the course of decades.

I'm sure if you have a credit card or something, you wouldn't have to worry about that.

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It's probably more accurate to say that the loan you took and paid back was insufficient to establish a high credit rating due to insufficient history, rather than "wrecking" existing good credit.

Right, I also paid off my loans within two years, and it doesn't seem to have affected my (very good) credit rating negatively. I've also had a credit card in my name (with my dad as guarantor, at first) since I was about 16 -- and he has sterling credit. That helps a lot.

Unbelievable. I have never bothered to check my credit score, as I can't bear the thought of forking over even more money to that crooked industry. If what you say is true though, mine must be terrible as well. And here I thought acting responsibly and paying off my debts in a timely manner would be looked on favorably.

the entire point of a credit score is to measure how likely the lender is to get a lot of money from you.

It makes sense that deadbeats have low credit score, however, it also makes sense to lower the rating of someone who pays it off fast, thereby causing you to not gain as much money as if they had waited 10 years to pay you off.

I hate that industry so much.

exactly, they want people who get tons of credit debt, and pay the minimum every month for 30 years.

The "credit score" is important but when a good lender is evaluating the risk of a potential borrower, they won't rely on a mere score they'll consult the actual credit history.

A credit history is basically a record of loans and payments. If you're late on a payment, long enough for your lender to report it to a credit agency, then they will show up on that history.

In this case: paying back a $20,000 loan in 2 years is impressive but doesn't really say much about your ability to pay back $300,000 over 30. So yes, it might have been marginally better to pay back the $20,000 over 10 years. If you're going to loan someone $300,000 to buy a house, you want to see data that the person is capable, organized, and diligent enough to pay it back. People paying back mortgages in 2 years is probably not a serious problem for most banks.

You can see your credit history at https://www.annualcreditreport.com/cra/index.jsp

[citation needed]

do they really disclose that? That you would be better being a sucker for credit?

Do you want a high credit rating, or do you want money in your pocket?

If you don't need to borrow money, then you don't need a credit rating. In this day and age, a house is no longer a given (since they have proven to be extremely poor investments at times), so you don't necessarily "need" a mortgage anymore. If that's your situation, then your credit rating means a lot of nothing. You don't need a good rate on your mortgage. You need cash in your pocket.

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