New Member
MissyMiss
Posts: 1
Registered: ‎04-22-2007
Consolidating Student Loans When You Don't Have Anything Else on Your Credit Report

I have a FICO of 503.  Ouch.  Last time I checked, it was almost 600.  It dropped drastically when I fell behind on my student loans (around $18,500 and listed as 13 separate accounts).  I don't have any credit cards.  I don't have a mortgage.  I don't have a car loan.  I have a few collections, but they're all from at least 3 years ago and total less than $1000.  I have some things that show as late but were never sent to collections.  These also total less than $1000 and are all from 2008 or 2009.  I have a judgment for around $4000 that is paid in full.  It doesn't even show up on my ScoreWatch.  

 

I know a lot of people say consolidating won't help, but I have very little debt other than the student loans, and none of it is recent.  If I consolidate and then pay on time for a few months, do you think that will increase my score drastically?  If not, what would you do if you were me? 

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llecs
Posts: 32,869
Registered: ‎08-04-2007
Re: Consolidating Student Loans When You Don't Have Anything Else on Your Credit Report

MissyMiss wrote:

I have a FICO of 503.  Ouch.  Last time I checked, it was almost 600.  It dropped drastically when I fell behind on my student loans (around $18,500 and listed as 13 separate accounts).  I don't have any credit cards.  I don't have a mortgage.  I don't have a car loan.  I have a few collections, but they're all from at least 3 years ago and total less than $1000.  I have some things that show as late but were never sent to collections.  These also total less than $1000 and are all from 2008 or 2009.  I have a judgment for around $4000 that is paid in full.  It doesn't even show up on my ScoreWatch.  

 

I know a lot of people say consolidating won't help, but I have very little debt other than the student loans, and none of it is recent.  If I consolidate and then pay on time for a few months, do you think that will increase my score drastically?  If not, what would you do if you were me? 


Welcome!

 

My vote would be that your scores will drop if you reconsolidate. Don't do it for FICO reasons. You already have an installment mix so added loans won't help and adding new accounts will ding your scores.

 

Those collections will hurt for the full 7-yrs. I'd take steps to fix that via GW letters if paid or PFD letters if unpaid. Look around as others had success with removing paid judgments via having it vacated.

 

I'd also consider improving your mix with an added CC or two. I'd start with a secured CC from somewhere, but I would focus on repair first.

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Senior Contributor
laz98
Posts: 4,336
Registered: ‎09-06-2008
Re: Consolidating Student Loans When You Don't Have Anything Else on Your Credit Report

Definitely will not help your scores drastically.  Installment accounts are only 10% of your FICO score.

Latest scores: Walmart TU: 769. MyFICO TU: 769. DCU EQ: 755. MyFICO EQ: 780. PSECU EX: 756. MyFICO EX: 780.
Regular Contributor
InvincibleSummer2
Posts: 171
Registered: ‎06-15-2012
Re: Consolidating Student Loans When You Don't Have Anything Else on Your Credit Report

A couple of thoughts:

 

Scorewatch may not be showing you everything. Have you pulled your reports from AnnualCreditReport.com? I'd be very surprised if your judgement wasn't listed; given your scores it's possible it's factoring into your FICO score.

You'll also want to get some positive tradelines going. Not having credit cards at all can hurt your score. Lenders want to see you can use credit responsibly, so think about a secured card or two if you're serious about wanting to get your scores up.

I agree wholeheartedly with the advice not to consolidate. With no other tradelines, your AAOA is going to tank. That is 15% of your score, admittedly not a huge percentage but given that you have no positive revolving tradelines, that's going to hurt.