Question
I have almost 9k more in student loans and I'm paying almost 100 a month. This isn't a lot compared to some peoples loans, but when you pay 1k for rent and utilities then an extra 100 hurts the team. Anyways, my question is when you consolidate student loans does this affect your credit score? I have over a 700 rating and if this does affect the rating I'd rather stick to paying 100. Worked too hard to get my credit up and rather not take any unneccessary hits on it. Thanks in advance.
I have almost 9k more in student loans and I'm paying almost 100 a month. This isn't a lot compared to some peoples loans, but when you pay 1k for rent and utilities then an extra 100 hurts the team. Anyways, my question is when you consolidate student loans does this affect your credit score? I have over a 700 rating and if this does affect the rating I'd rather stick to paying 100. Worked too hard to get my credit up and rather not take any unneccessary hits on it. Thanks in advance.
Answer
1) It may affect your score A LITTLE BIT if the consolidation company pulls your credit report (a hard inquiry). 2) Why do you care if your score is affected? Do you plan on making a large purchase / getting a large loan in the near future (6mo-1yr)? If not, who cares? 3) If the interest rate on your loan is variable, then generally by consolidating you lock in your interest rate (it becomes fixed instead of variable). It may be good or bad, depending on what your rate is and what you think will happen to interest rates. I think there's also a difference between consolidating while in grace period (the first 6 months after graduation) or later, because I think the interest rate in grace may be lower. Personally I think you should find a cheaper place to live. That is what's really "hurting the team," not some 100/mo.
1) It may affect your score A LITTLE BIT if the consolidation company pulls your credit report (a hard inquiry). 2) Why do you care if your score is affected? Do you plan on making a large purchase / getting a large loan in the near future (6mo-1yr)? If not, who cares? 3) If the interest rate on your loan is variable, then generally by consolidating you lock in your interest rate (it becomes fixed instead of variable). It may be good or bad, depending on what your rate is and what you think will happen to interest rates. I think there's also a difference between consolidating while in grace period (the first 6 months after graduation) or later, because I think the interest rate in grace may be lower. Personally I think you should find a cheaper place to live. That is what's really "hurting the team," not some 100/mo.
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