topic Re: Direct Consolidation Impact on lines of credit? in Student Loans

Direct Consolidation Impact on lines of credit?

loviedovie — Fri, 04 Jan 2013 07:41:00 GMT

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. ??

Re: Direct Consolidation Impact on lines of credit?

SCF — Sat, 05 Jan 2013 02:25:38 GMT

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.

Re: Direct Consolidation Impact on lines of credit?

loviedovie — Sat, 05 Jan 2013 08:07:05 GMT

@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!

Re: Direct Consolidation Impact on lines of credit?

SCF — Mon, 07 Jan 2013 01:49:54 GMT

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