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Debt consolidation / credit score

Date: Mon, 07/06/2009 - 08:32

Submitted by anonymous
on Mon, 07/06/2009 - 08:32

Posts: 202330 Credits: [Donate]

Total Replies: 2


If I consolidate 5 different student loans into one loan from a bank, will this help my credit score, and if so, how much and how quickly?


Consolidating your debt probably wont help your score. It may count as opening a new loan and applying for new credit,which may hurt your credit. your debt will remain the same. However, if you can consolidate into one loan that will save you money on interest, i would do so. When i consolidated mine, it had no effect on my score but i saved a lot on interest and was able to pay it off faster and that improved my score by lowering my debt/income ratio.


lrhall41

Submitted by anonymous on Tue, 07/07/2009 - 01:28

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Are you already delinquent with your student loan accounts? If you are not and are still current with your payments, your credit score will increase. This is because not only your credit history would improve, but also your debt to credit ratio will decrease as a result of debt consolidation.
Now, if you are already delinquent with your payments, your score may not improve immediately because it has already been listed as negative in your credit report.


lrhall41

Submitted by SC on Tue, 07/07/2009 - 04:35

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