Does consolidating student loans hurt your credit score
Does consolidating student loans hurt your credit score - sex dating in wade mississippi
A credit score is derived from items reported in your credit file.It uses a complex mathematical algorithm to come up with a score that predicts whether you are more or less likely to default on your next loan.
These issues include income, job stability, your ability to use dormant credit lines and more.I want you to concentrate on your overall financial health rather than on a score or rating.If your financial health is strong, the measures will reflect it.The real questions to be answered are: Why do you have such a large amount of credit card debt?The principal reason is you will have a new inquiry and huge installment loan appear on your credit report, even though you also will have much lower debt-to-credit ratios on your credit cards.The potential underwriting risk that you present to a new lender is measured in conjunction with your credit score and will now have to incorporate that you have the chance to begin adding to your credit card balances again.
And the fact that many people do just that is why the action will temporarily cut your rating.For the record, and for those who don't know the difference, a credit rating and a credit score are 2 different things.The cliche about rearranging the deck chairs on the Titanic came to mind when I read your question.Debt consolidation won't address the real problems that may sink your credit rating!SEARCH RATES: If you're considering a personal loan for debt consolidation, first check out the rates at Moving the balances of your credit card accounts into an installment loan for purposes of consolidation may cause a slight drop in your credit score.