cancel
Showing results for 
Search instead for 
Did you mean: 

Consolidated a student loan - showing up as a new account

ridiculous_nicholas
New Member

Consolidated a student loan - showing up as a new account

So I've had student loans since about 2003.  I have 2 from a private lender and 2 from the dept of education.  I was making 4 seperate payments and decided to consolidate my 2 federal loans.  These were not consolidated into a private lender but instead consolidated with the dept of education.  It essentially just combined the loan amounts and now I pay the DoE 1 payment instead of 2.

 

This unfortunately is now showing as a new account opening in my credit report/fico score.  I can only assume this is hurting my fico score.  Is this something I should dispute or is this just the way it is when I consolidate?  Since both loans are with the same lender I can't see how this could be considered me opening a new account.

Message 1 of 5
4 REPLIES 4
altimatuner59
Established Member

Re: Consolidated a student loan - showing up as a new account

dude, you just opend a new account. all those consolidted loans= new account. the old ones will show closed, account transfered/sold to another lender. and it may stay on your report for up to 10years. so hopefully everything was paid on time.
TU:723 EQF:712 EXP:739 5/09
Message 2 of 5
ridiculous_nicholas
New Member

Re: Consolidated a student loan - showing up as a new account

Everything was paid on time, I just did it out of convenience and to lower my payment $50 a month.  So what you are saying is that consolidating loans will always hurt your credit?
Message 3 of 5
llecs
Moderator Emeritus

Re: Consolidated a student loan - showing up as a new account

Whenever you consolidate, you'll always have a new TL reporting. That new TL will lower your AAoA and that'll ding your score. Also, FICO doesn't like to see new credit. On average, I've lost 20-25 points with each new account appearing. A large majority of your point loss will return within a year.

There's nothing to dispute. It is reporting accurately. You'd have to weigh the economic benefits of saving hundreds or thousands in lower interest payments by your consolidation in relation to a relatively small drop in FICO score.
Message 4 of 5
Lel
Moderator Emeritus

Re: Consolidated a student loan - showing up as a new account

I consolidated a whole raft of student loans into a new consolidation loan a few years back.  I wasn't checking FICO scores back then (heck, I hadn't even heard of them), but when I finally did check mine, it clearly did not have any long-term negative effect.  As long as you pay on time, you'll be fine.

 

You can't pay your bills with FICO points.  Saving money was your goal, and you accomplished it.

Message 5 of 5
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.