When you pay a lump sum on a Stafford,

[Tourniquet416]

does it do anything to help your score?

i have $30,000 + in student loans. i plan on making two, $5,000 payments in the next year and a half. will this help my score out?

[madcrapper]

Im no expert by no means otherwise I would not be in the rebuilding process myself, however, I do not believe you will see a huge or even significant benefit from making lump sum payments. This is because your scores are weighted heavily toward revolving credit balances. Student loans are reported as installment accounts which have a set payment and balance that only goes down slightly per month (like an auto loan). To make a lump sum payment on an installment won’t help much. In my case I have 18 more years of a 20 year consolidated student loan and plan to be paying for the remainder. It helps the history (provided you pay on time) and length of establishment. If you have $10,000 to do as you wish and you want to work on you credit either pay off other delinquent debts if you have any or put as much as you can into a secured credit card with BoA or another. That 5-10k in a secured card as revolving credit will help you out 10x (figuratively) more. That’s the way I see the picture.

[jq26]

Add to that the fact that most student loans are very low interest (2%-5%). IMO, paying off a student loan is a wasted opportunity for your cash. Park your money in an investment such as a mutual fund. You may get 5%-20% return on that cash. Then, if you'd like, pull out a portion of your profits once per year and pay down that Stafford with it. On top of everything else, you may/should be writing down your income a bit by continuing to service the loan anyway, since student loan interest is an above the line deduction.

Of course, paying off bad debt (revolving credit) is of the highest priority.

Play with the numbers and see for yourself. Just one man's opinion, for what its worth!