Will consolidating my student loans increase my credit score
Making on-time payments regularly is one of the surest ways to ensure your credit score reflects positively on your character as a borrower.
Keep in mind debt in and of itself is not a bad thing and student loan debt in particular is not automatically a bad thing for your credit score.
As financial expert Dave Ramsey once wrote, “You can only do it once.”Applying for any line of credit requires serious consideration and weighing of risks and rewards.
When it comes to student loans, the stakes are even higher — without them, some students could never attend school.
While having a plethora of credit lines can be detrimental to your credit, having a handful of well-managed debts can boost your score over time.
One thing to keep in mind, as your monthly payments go down, your ration of debt-to-income also goes down – this factor is particularly important as you go forward and try to open more lines of credit in the future (like mortgage loans, specifically).
There are a lot of benefits to this move, including the potential to give your credit score a boost.
Therefore, the first step to address student debt is to look at the types of loans held and the consequences of consolidating them.Your credit history is a snapshot of who you are financially. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward –- and free. " With so many websites offering free financial tools, it can be hard to know whom to trust.However, be certain both parties understand the potential consequences of having a cosigned loan.Above all else, understand one of the largest pieces of the credit score pie is payment history.
In other words, while paying off a loan is inevitably a good thing for credit scores, holding an account open and responsibly managing the debt can actually be more beneficial to your credit score than paying it all off in one lump-sum.