General Credit Topics

[jspeer]

I'm currently in school, I have exactly 6 student loans that total $12,578.  I'm trying to raise my FICO scrore, if I consolidate these 6 loans will this help me or will it hurt?  I have been trying to get a answer on this for about 1 month now and nobody seems to know!!! So if anybody has any input I would sure appreciate it.  Thanks, Jason

[masdeocho]

Jason - Rather than worrying about the effect (if any) on your credit score, you should look at how consolidating would affect the cost of your loans.  What is the interest rate of each loan?  It is only worthwhile to consolidate the loans if the interest rate on the consolidated loan is LOWER than all the rates of the original loans.

[DionLawOffice]

I agree!  Look at the terms.  Student loans seem to most often have a much smaller impact than other unsecured debt like credit cards.

[Tuscani]

Student loans are installment loans. Installement loans do not hold as much weight as revolving credit. I would not bother consolidating unless you can same some money.

[htc]

Better yet deliver some pizza a few nights of the week and pay it all off.  Unless the decimal point is in the wrong place you should be free and clear within 6-12 months easily.

[reginaastralis]

When are you out of school?

As of right now, students can't consolidate while in school.  The best reason to consolidate, other than making you have one single lender and lowering your monthly payments, is to lock in an interest rate.

Right now, consolidation companies don't know what next years rate is going to be.  The "dooms day" in June 30th.  If you are going to be out of school by June 30th, then consolidation is something for you to consider.  If not, there is nothing you can do this year ...

The past year, student loans went up a little over 2%, they have been averaging this since two years ago.  We don't know if they are going to go up this year since there is a Dem. control of both houses and one of the things they wanted to do was lower interest rates on student loans in the first 120 days.

If you have any additional questions, just ask.  Not all consolidation companies are created equal.  Some companies give you an interest rate deduction for doing direct payment, while others also deduct after a certain amount of on time payments.  I used to work in student loan consolidations, so I know a little on this subject.

[monro411]

I have a similar problem.  My Fico said that I have too many new accounts?  When I look at what is flagged, I see my car payment (6months old), a personal loan (4months old) and 4 student loans through Citibank (all within the past year).    If I consolodate these into one account, do you think will that help me at all?

[monro411]

I have a similar problem.  My Fico said that I have too many new accounts?  When I look at what is flagged, I see my car payment (6months old), a personal loan (4months old) and 4 student loans through Citibank (all within the past year).    If I consolodate these into one account, do you think will that help me at all?

[masdeocho]

---

monro411 wrote:

I have a similar problem.  My Fico said that I have too many new accounts?  When I look at what is flagged, I see my car payment (6months old), a personal loan (4months old) and 4 student loans through Citibank (all within the past year).    If I consolodate these into one account, do you think will that help me at all?

---

Probably not.  If you consolidate them into a new loan, you still keep all the "old" accounts on your CR (plus you'll add another new account). It just takes time for them to age -- like fine wine.