Will Consolidating my student loans affect my credit score?

[Anonymous]

As the title says, will consolidating my student loans negatively affect my credit rating? It is very good at the moment and I have no problem paying the loans but consolidating them gets me a better interest rate and lower monthly payments. I have 10 days to decide if I will proceed with the consolidation or cancel it and could use some advice.

Thanks

[Anonymous]

My credit score increased with consolidation I think it was around 30 points.   There are a lot of moving parts in the increase: closing a lot of small accounts, lowing the overall payment and showing a single account with a larger balance.

[Lel]

---

@Anonymous wrote:

As the title says, will consolidating my student loans negatively affect my credit rating? It is very good at the moment and I have no problem paying the loans but consolidating them gets me a better interest rate and lower monthly payments. I have 10 days to decide if I will proceed with the consolidation or cancel it and could use some advice.

Thanks

---

What is more important to you right now - saving money or preserving your credit score?  And what is your current FICO score?

When I consolidated my student loans a couple years ago, there was no discernible impact on my score.  I can't say for certain whether it had a specific effect, because there were a variety of fluctuations in my credit report that affected my score.  But there was no big drop.

For me, decision to consolidate was based on the fact that I could save a considerable amount of money on interest payments.  I didn't have any immediate need for new credit, so any effect on credit score was not a concern for me.

[RobertEG]

It makes a lot of financial sense, but I dont think it will improve your credit score.

If you "consolidate" the loans by taking out a new loan, you will probably add a new account to your credit report.  This will most likely lower your average age of accounts.