Consolidating student loans and fico scores

[ineedadvise]

My husband's student loans are almost out of their forbearance period.  He has three loans that total $475/ month.  If we consolidate them the repayment drops to $200/month.  Will consolidating the loans affect his credit score?  We are trying to buy a house within 6 months and his scores are currently 640 640 & 642.  We have some more CC debt to pay off which will help increase his scores, but I don't want to do anything that would hurt our scores.  Anyone out there that can help?

[MizzB]

I have the same question... I'm eager to see the responses. I have 7 independent students loans from undergrad and grad that I want to combine to keep track of payments when my foreberance is over. Will this affect my score? Also how will this impact my average age of accounts?

[ineedadvise]

Hopefully someone will have an answer for us!  We've been through three layoffs (most recently Nov 08) so I know first hand how damaging they can be.  We learned from each and ended up better off each time and more prepared for the "just in case".  Best of luck to you!

[Anonymous]

I, too, would like to know the answer to this. I'll be graduating soon and if left the way they are my monthly payment will be ~$500, but if I consolidate, I'm sure I'll pay at least $100 less a month. Anyone?

[Anonymous]

I can only tell you what happened to me; hope this helps.

I recently consolidated all my Sallie Mae loans with Direct Loans.  When that happened, I had a ten point drop in my scores after the new tradeline was added, but from what I understand, the drop is temporary and will probably not last more than a few months.  So, for me, it was only a few points and not too bad overall. 

[ineedadvise]

Thank you!!  That's exactly what I wanted to know.  Obviously it's a case by case basis, but he has two Direct loans and one Sallie Mae...so hopefully that will be our situation as well. 

[MizzB]

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@Anonymous wrote:

I can only tell you what happened to me; hope this helps.

I recently consolidated all my Sallie Mae loans with Direct Loans.  When that happened, I had a ten point drop in my scores after the new tradeline was added, but from what I understand, the drop is temporary and will probably not last more than a few months.  So, for me, it was only a few points and not too bad overall. 

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Thanks. This is great information to have. I had a feeling that a drop would occur. Overall, I think in my siutaion a minor drop in points and having one tradeline to manage is better than the risk associted with me trying to manage multiple loans with multiple due dates.

[Anonymous]

You're welcome!

Direct Loans is also the best--easy to deal with and flexible.  It's also nicer to see your credit report with just one, simple installment loan (after consolidation) instead of all those separate (unconsolidated) loans reporting.  Simplifies things a lot.  

[Anonymous]

After consolidation with Direct Loans, my payment dropped.  It depends on which repayment plan you choose which, of course, depends on your personal financial situation.

[Anonymous]

Oh, by the way, paying down cc debt will help your score immensely, easily offsetting any point drop that occurs after consolidation.