Consolidating student loans lower credit score
In other words, the value of a good credit score is the chance to save money.The purpose of refinancing or consolidating student loans is to save money.If the credit score is high enough to qualify for a low rate or favorable repayment plans, then the credit score has done its job.In many cases refinancing or consolidation can save hundreds of dollars per month and thousands of dollars per year.
If consumers have too many, their score will go down.By consolidating your student loans, many student loans are replaced with one new loan.The borrower still has the same amount of debt, but the number of lines of credit goes down, thus raising the credit score.Ultimately, most borrowers will likely see a small increase in their credit score, but as noted in the comments by some readers, it is still possible that the credit score can drop.That all being said, the credit score movement shouldn’t be a concern…
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Another factor that has a minimal effect on credit score is checking interest rates.