JustRewards wrote:That's because they are one of the few types of debt that you can't ever get away from, even in bankruptcy.
I have enough money saved up to pay it off right away or at any other point later
There is a theoretical slight advantage to getting the loan because it will make your credit mix stronger but it sounds like the account will be a short term credit building plan
Will overall my credit score increase or decrease as the result of taking out that loan? And what do you mean by a short term credit building plan?
I can pay it off right away or later, depending on what would maximize my credit score. What would maximize it?
So far I don't understand why I shouldn't take out that loan other than that it can't be discharged in a bankruptcy (which is not going to happen)
It is not possible for us to know how this will affect your scores without having a 100% complete picture of your credit profile and even then, we'd still be guessing.
What is known is that in the short run, the action of opening the account (not sure actually if opening a student loan requires a credit inquiry or not - I've never opened one - but I assume yes) will most likely cause an immediate short term drop in your scores (new inquiry and new account reporting will lower your average age of accounts and increase the number of inquiries you have - both small factors, but with a limited profile, will likely have some affect on your scores). There will likely be some slight overall increase in your scores after a year or so once the account ages, but if you're going to close it soon thereafter there really is no point. You're likely to achieve mostly the same results with a new credit card account - that you will hopefully keep long term.
As a general rule of thumb, only apply for credit that you need. You clearly don't need a student loan. You may not need another credit card either, but you're more likely to make use of and to need a credit card account long term than a student loan you don't need now and definitely won't in the future. Look up the components of your credit score. The only marginal advantage the loan will offer over a credit card is "credit mix" and it just won't make a big difference is the long and short of it...
Hope this was helpful.