Regular Contributor
loviedovie
Posts: 206
Registered: ‎12-20-2012
Direct Consolidation Impact on lines of credit?

Hi!

Does anyone know if consolidating loans via direct consolidation will: 

A) remove all of the tradelines and replace them with one new one

B) make the average age of accounts only as old as the new one

 

I am wondering if these things will hurt my score..

 

OR- does it help because the other accounts show closed, paid. ??


Starting Score: EXP 615 | TU 610 | EQ 635
Current Score: EXP 719 (lender pull 10/15) | TU 707 | EQ 700 (lender pull 10/25)
Goal Score: 740
Community Leader<br> Established Contributor</br>
Community Leader
Established Contributor
SCF
Posts: 946
Registered: ‎06-09-2008
Re: Direct Consolidation Impact on lines of credit?

Consolidating your loans will cause your current trade lines to be marked as paid, possibly with a note saying they were transferred, consolidated or refinanced (I have all 3 on my reports, seems to vary by original lender and CRA).  Then, a new account will be opened, with a open date that matches when your consolidation loan was processed.

 

It won't impact your average age of accounts much because the old accounts will remain on your report around 10 years.  Overall, you may see a few points of movement in your score, but in the long-term, it will have no real impact.

Regular Contributor
loviedovie
Posts: 206
Registered: ‎12-20-2012
Re: Direct Consolidation Impact on lines of credit?

SCF wrote:

Consolidating your loans will cause your current trade lines to be marked as paid, possibly with a note saying they were transferred, consolidated or refinanced (I have all 3 on my reports, seems to vary by original lender and CRA).  Then, a new account will be opened, with a open date that matches when your consolidation loan was processed.

 

It won't impact your average age of accounts much because the old accounts will remain on your report around 10 years.  Overall, you may see a few points of movement in your score, but in the long-term, it will have no real impact.


Oh really? I thought that the different CRAs count things differently, and that for some AAoA only includes your current open accounts..  Great if that isn't true!


Starting Score: EXP 615 | TU 610 | EQ 635
Current Score: EXP 719 (lender pull 10/15) | TU 707 | EQ 700 (lender pull 10/25)
Goal Score: 740
Community Leader<br> Established Contributor</br>
Community Leader
Established Contributor
SCF
Posts: 946
Registered: ‎06-09-2008
Re: Direct Consolidation Impact on lines of credit?

Different FAKO scores may not consider your closed accounts for your AAoA, but all of the CRAs factor them in.