Will Consolidating My Student Loans Help My Credit Score?
But what happens when you consolidate a student loan? Having good credit is crucial to so many aspects of your financial life-everything from buying a house or car to landing a job. online payday KS It’s smart to know how refinancing will look to creditors before you make the move. It’s important to note here that while we’re using the word consolidate to refer to replacing several different loans with a single loan from a private lender, the actual word for this is refinancing.
Consolidation technically refers to replacing only your federal loans with a single Direct Consolidation Loan through the federal government-a different process than refinancing. Most people use the two terms interchangeably.
Now that we’ve got that out of the way, here’s an overview of the issues to consider when it comes to refinancing and your credit.
Will consolidating student loans hurt my credit?
There’s one way the process of applying for refinancing could ding your credit, though-and it involves a number of different lenders taking a look at your score.
Let’s say you’ve decided you want to refinance, but you’re not sure which lender to go with. So you apply with several different lenders to see which one gives you the best rate (a smart move). Each lender has to take a look at your credit score to decide what interest rate to offer.
The issue is that, depending on the type of credit pull the lender does, that check could show up on your score. And, fair or not, a lot of those checks can make you look risky to lenders–even though you’re just shopping around.
However, this can be a non-issue. There are two different types of pulls financial institutions do to get a look at your credit score-a hard and a soft pull. A hard pull can indeed ding your credit-but a soft pull won’t.
What’s the difference between a hard and soft pull? Continuar leyendo: “Will Consolidating My Student Loans Help My Credit Score?” →
Publicado el 14/3/2022 Categoría Kansas is a payday loan installment or revolving.
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