Q: My husband and I are proud parents of a soon-to-be college graduate. We had to take out two student loans to pay for school. If we consolidate the student loans, will it appear negatively on my credit report?
A: Congrats to your new grad! Lots of people consolidate student loans to lower their interest rates or extend the term of the loans (and that can make the monthly payments easier to manage). So it could be a smart move for you, too.
When it comes to your credit report, there are several factors to consider. It's possible that consolidating the student loans may result in an inquiry
, which has a small impact on your credit score. However, consolidating the loans usually results in lower monthly payments which can improve your debt-to-credit ratio and in turn your credit score But what will harm your credit standing is doing things like making late payments or skipping payments all together. Manage your loan with care, and your credit will remain happy and healthy!
Now that you know more about credit scores, sign up for TransUnion Credit Monitoring today and receive a FREE credit score.