Consoldating federal student loans
Today we will discuss the factors that can cause the credit score to increase, and the circumstances in which a credit score can drop.We will also discuss the reasons that a credit score shift should not be a concern or consideration for most borrowers.Many student loan borrowers are able to improve their credit score by consolidating or refinancing their student loans.Unfortunately, not all borrowers see an increase in their score.When consolidating or refinancing the old loans are paid in full.This means that those lines of credit are marked as closed.When consolidating student loans, a number of factors credit score variables are modified.Most of these changes improve a borrower’s creditworthiness according to the credit bureaus.
That all being said, the credit score movement shouldn’t be a concern…
Depending upon how the loans are consolidated, it could read that the loans were refinanced or it could just say that they were paid in full. One final advantage of consolidating student loans is that it can often lower your monthly payments.
This helps borrowers who are looking for new lines of credit as it will improve their deb-to-income ratio.
A fractional difference in interest rate on a mortgage can make a huge difference to the homeowner.
People on the hunt for a house should discuss any actions that might impact their credit score with their lender or mortgage broker.