If you are into that sort of thing

Does consolidating student loans affect your credit score

The Bottom Line Ultimately, if you have good or bad credit and are thinking about consolidating your student loans, it will depend upon the type of loans that you have. The nice part about Federal Student Loan consolidation is that there is no credit check involved. This is a mistake that could cost you a fortune in the long run. By consolidating you are able to lock in your interest rate and you can qualify for one of the many favorable Federal Student Loan Repayment Plans.

Another credit score advantage of student loan consolidation is that it will show that you have paid off all of your other loans. This especially helpful if you are trying to secure a mortgage. However, it is very important to look at the terms of your new consolidated loan to make sure that you are really getting a good deal.

It is critical that

It is critical that you do your research before you make any student loan consolidation decision. One final advantage of consolidating your student loans is that it can often lower your monthly payments.

Another perk about the direct loan consolidation is that it actually improves your credit score. One advantage of this approach is that if you pay off student loans with this loan, you now have bankruptcy protection on the debt. For Federal Loans, consolidation is usually a great idea, but for private loans it gets more tricky and it is important to be careful who you do business with.

Either way, your credit score is helped. It can even be hard with a good credit score. Another option would be just to get an unsecured loan and use it to pay down the balance on your student loans. One factor that determines your credit score is the number of lines of credit that you have open.

One final advantage of

This is especially true if you have a bad credit score. The primary reason is that no matter how good the rate or terms offered by a private loan consolidation, they almost never will be as good as those offered by a federal government consolidation. This helps your credit score because the ratio of debt to income will go down. Depending upon how your loans are consolidated, it could read that your loans were refinanced or it could just say that you paid in full.

You still have the same amount of debt, but the number of lines of credit goes down, thus raising your score. By consolidating your student loans, you replace your many student loans with one new loan.

As you can imagine, a record of debt repaid is a good thing. Most of these changes will cause creditors to look more favorably upon you. If you are into that sort of thing. If you have too many, your score will go down. When you consolidate your student loans, a number of factors are modified in your finances.