Consolidating loans affect credit score updating old shower fixtures
This would increase my available credit of ~20-25k, which I read is really good for the credit score.
now, using credit karma's simulator, if I paid off ~20k I would increase my credit score of about 100 points...however, how does the fact that I got a loan for that much affect the credit score in first instance?
If you are considering consolidating your loans, one mistake that you definitely want to avoid is combining your private loans with your federal government loans.
The primary reason is that no matter how good the rate or terms offered by a private loan consolidation, they almost never will be as good as those offered by a federal government consolidation.
Home mortgage, auto loans, insurance rates, and even employment interviews all depend on your credit score.
Interest Rates for many of these are greatly impacted on your credit score as well.
If you read every article on this website, and you only learn one piece of information it should be to not consolidate your federal loans with your private loans.
This is a mistake that could cost you a fortune in the long run.
Choose the option that optimizes your financing needs at the right time.
FICO, which issues the most popular credit score, treats installment loans differently than revolving debt like credit cards.
With revolving credit, balances tend to go up and down over time.
A bad credit score can cause banks to penalize you with higher interest rates or flat out reject your application.
For now, you might be wondering: Do student loans affect my credit score?