Does consolidating student loans affect credit score

Another thing to note about deferments and loan repayment is that if your student loan becomes delinquent, you may no longer be eligible for a deferment. Once your loan is gone, you’re no longer making those monthly payments on time, thus ending your positive payment history on your credit report.

A Huffington Post article explains that yet another way in which paying off your student loans can damage your credit is by reducing the type of credit you have.

does consolidating student loans affect credit score-11

A growing student loan debt can deter a lender, such as for a mortgage, from loaning to you, according to Money Crashers. In any situation, putting a loan in deferment is better than not making payments.

Deferments aren’t an option for every loan or every situation, but if you’re experiencing an economic hardship, it’s something to explore. Working hard, making extra payments, and paying off your student loan balance will help your credit, right? Paying off your student loans too quickly can actually bring your score down, according to All

Just like the other issues, it depends on your situation.

As always, research the options but consider what is going to be best for you.

You’re showing that you’re managing your debt correctly and are able to pay your loan as agreed.

Student loans are often treated as installment plans on your credit report.

Having multiple types of credit, such as a loan and credit cards, can improve your credit.

Once your loan is paid off, you’re eliminating that type of credit.

On the other hand, consolidating could mean you lose certain borrower benefits (e.g., student loan forgiveness, deferments, flexible payment plans), lengthen your repayment period, and even end up paying more over time.

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