Will consolidating my student loans improve my fico scores
In the case of most medical debt, consolidation might not be the answer if you are hoping to save money on interest payments.
Medical debt typically has a very low interest rate, and in some cases no interest.
This grace period is intended to give people extra time to settle any issues with insurance or to make a payment toward their debt.
Depending on what type of student loans you have, there are various consolidation options available.
For people using a debt management plan for consolidation, it is important to fully understand your agreement with your credit counselor.
It is also important to know whether you are working with a credit counselor from a not-for-profit organization, or if you are working with a for-profit debt settlement/consolidation firm.
It is important to make sure that your credit counseling organization makes all payments for you on time.
Debt consolidation has the potential to hurt your credit score in several ways, depending on which method you use.
Although debt management plans do not appear on your credit reports, credit counselors may sometimes require that you close your other credit accounts to ensure you don't spend outside of your repayment plan.
Closing revolving credit accounts will increase your overall credit utilization ratio—which will impact your credit scores.
While debt consolidation is mainly a method of lowering or eliminating mounting debt, it can also have a positive effect on your credit score.
Beyond helping you reduce your number of monthly debt payments and save on interest over the life of your loans, debt consolidation can help you eliminate or drastically reduce your total debt over time.