Does consolidating your student loans affect your credit
No bank manager or loan officer wants to have to answer about why a loan is delinquent and have to go through the process of attaching paychecks if they can find a solution agreeable to both parties.The key here is to notify your lender before you miss a payment and to set up a new repayment plan.According to Federal law, you are allowed a free copy from these agencies each year.If there is information that is false, misleading or happened over a decade ago, then you need to look into having it changed or deleted as soon as you can.First, there is getting a student loan or loans for school.While a credit score is not considered when applying for Federal student loans, a poor one (below 650) can stop an application for a private student loan dead in its tracks.As mentioned above, student loans are installment loans.They are weighed less against your credit score than other types of loans and much less than credit card debt.
A student loan in deferment or forbearance will NOT hurt your credit score.All of this puts student loans, federal or private, in the category of “good credit”.Unlike private lenders, federal student loan lenders do not report past due accounts until they are 60 days past due and even then until the end of that month.Future creditors understand that a student loan means there is no larger balance of available credit and that your monthly payment will not change over the lifetime of the loan.Since paying off an installment loan early can mean a loss of income (interest) on the loan to the lender, it may actually send the wrong signal to potential future creditors and lenders.
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One of our own contributors here at Student Debt Relief was once denied an auto loan because he was reported as deceased by one of the credit reporting agencies.