Just received notice from Experian that my student loan debts increased, despite me paying my loans every month, on time. Regardless of interest, I have been making my payments, so I don’t understand why Mohela is reporting an increase in my loans, unless this is due to interest? The amounts are minuscule, my Experian account shows two loans with increased amounts of $59 and $33. This brought me from a score of 815 to 790.
Background info- my lender is Mohela and I’m on Income-Contingent Repayment, enrolled in the PSLF program (not sure if that matters). Anyways, can someone help me understand this? Could this be a reporting error on behalf of Mohela?
Credit score dropped due to student loans??? MOHELA
byu/joebidens3rdnipple inStudentLoans
Posted by joebidens3rdnipple
2 Comments
If you are on an IDR plan your payments don’t typically cover the accruing interest. That means your total outstanding balance keeps growing. So your debt has increased
If your payments are less than the accrued but unpaid interest, then the remainder of interest is added to your balance. Higher balance impacts debt to income ration which is about 30% of the makeup of a credit score.