Loans in seperate accounts - helpful or not?

[Anonymous]

Good day all,

I've been slowly rebuilding my credit from a crash and burn several years ago, and looking to get a new car now.  I have about a 670 credit score (some of the reports show slightly higher).  I paid off all my cards in the past month or two.

I have a number of student loans with Nelnet at a 2.47% (about 9K) and 5K with direct loans.  All are current.  All my balances are paid down on my credit cards, no high limits though (500-750).

I'm just wondering if it would be worth it to consolidate the Nelnet loans and if that would help my score.  I don't like how they're like 6-7 seperate accounts for Nelnet, but I don't know if that's making a score difference,  and if there would be any benefit to consolidating them for the score.

I'm trying to qualify for a 20K car loan, and I make about 57K a year.  Technically, the auto loan part belongs in the auto loans part of the forums, so this question is mainly about the student loans.

Would there be any benefit to the above, or am I being paranoid?

[laz98]

it's probably not really making much of a difference, if they have been open a while.  they main reason i think they would affect your score is when they're new, because you get that new account ding, & the new amount of debt.  consolidating will not change that.  these accounts will stay on your reports; they will just be listed as closed instead of open.  you will probably get a new account ding again if you consolidate, although it is probably temporary.  i don't think it will raise your score much, if at all.

[Tazman81]

With regard to the student loans, you may see a temporary decrease in your score if you consolidate because of the new account, but it will likely recover fairly quickly.  Now, it sounds like you have a really good interest rate with your current loans.  Depending on if any of the loans you are consolidating has a higher rate, then you would loose the lower rate because the consolidation would take an average of the interest rates.  This you will have to play with to see which way is cheaper.

Now, with respect to the vehicle.  I think the only way a consolidation will help you with purchasing a vehicle is that more than likely it will give you a cheaper monthly payment.  With a cheaper monthly payment, you have now decreased your DTI (debt to income) ratio, and that looks better when applying for other credit as a loan officer will want to make sure you have enough money to pay for the car.