Is there a negative effect on my credit history if I refinance my student loan? I keep getting mailers…?
Sep 24
Student Loans Q&A negative impact 4 Comments
I don’t owe that much, and I have no trouble with my current monthly payment. I don’t want to refi if there’s a negative impact on my credit.
Related posts:
- What short term effect would the refinancing of a defaulted student loan have on my credit rating? I recently consolidated a defaulted student loan and need to purchase a new vehicle. Approximately how much of an impact on my credit score will the consolidation have the day after it hits my credit report? I’m just curious if anyone could ballpark the number of points it could jump,...
- How long does a defaulted student loan show up on my credit history if has since been refinanced? My loans that were opened in 1994 are now refinanced and the new ones are current. ...
- I am a student, have no credit history and have limited options on co-signers. Am I out of luck? Here’s the situation: 1. I have about two months of credit history with one credit card, and I paid off the balance on time no problem. 2. I am a sophomore, have already filled out FAFSA, and am already taking out federal loans. 3. I need an additional private loan...
- Student Loans : How to Get a Student Loan With No Credit History or Co-Signer Getting a student loan with no credit history of cosigner is possible through federal student loans, which are not based on credit history, or it is possible with a higher interest rate. Even with no credit history or cosigner, find student loan opportunities with financial advice from a guidance...
- With a student loan, and not the greastest credit, how do I refinance? We can’t handle the oo.00 a month payment and the 12.499 percent interest. We are still in our grace period, there are so many lenders out there, I don’t know where to start. ...
- How can I refinance my car with bad credit? I have a 0 car note. Crazy I know! I have been working hard trying to get my credit back on track. All my recurring bills are automatically taken out of my account, I no longer have credit card debt (I now use a secured credit card only) and I...
- Do credit unions refinance student loans? I have a little under ,000 in student loans. I am trying to look for a bank or credit union that I can I guess "refinance" my loans with. The company that I pay only has a 10 year plan which makes my minimum payment near 0 a month. I...
- I want to refinance my house. Should I add my student loans to it? I want to refi my house that we bought at 4,000 at 7.875% it was fixed for 2 years and now will go up to 10.875% Now, I have a ,000 second mortgage that I accumulated from not having a job and misc expenses. I want to combine them together....
- Home Equity Line of Credit vs Refinance? I am currently in Chapter 13. I filed 10/04. I have a home with approx 100K in equity. I would like to pay my way out of BK at the 36 month mark (approx 16K) , pay off the second mortgage (which was down payment assistance, 50) and pay off...
- does consolidating student loans look bad on your credit report, or affect your credit score? Also- what impact does having a savings or money market account have on your credit score, if any does it matter how long the account has existed. ...
Sep 24, 2009 @ 07:10:42
Given the fact that you don’t owe much and don’t have trouble with the current payment, there is no compelling reason to refinance unless you can get a lower interest rate, which would reduce your total outlay to the bank. This would be surprising to me, since interest rates have actually be rising of late.
And there might be a slight temporary dip to your credit score because of the necessary inquiries, but nothing to worry about. The refi intelf would have a negligible impact. So you real question should not be if it would impact your credit score, but if there’s any tangible benefit to refinancing at all.
Sep 24, 2009 @ 07:10:42
It will not affect your credit score if you consolidate your student loan. Be careful if you consolidate, certain banks and financial institutions have "fine print" on the terms.
I personally consolidated through Citibank. My monthly amount lowered almost 40%, but the negative effect is that I just extended my debt years. To prevent that from happening, I still pay the same amount before I consolidated. The extra payment goes directly to the principal.
Sep 24, 2009 @ 07:10:42
The more you apply for credit, the lower your score. Be careful and only apply to those that you are really interested in. But it isn’t going to show negatively- it just lowers it a few points. The few points is only crucial if you are on a border line of tier 1 or tier 2 credit and you are about to purchase a car or home. If you are refinancing and lowering your Debt, or getting better interest rates, after about 4 months, it may actually improve your credit. The thing they look for is that your credit cards are not above 30% of the available balance. So if you have $1000 available credit card debt, and you have more than $300 owed on those- that will decrease your score dramatically. Be careful on student loans if they are deferred. If they are deferred you are not making payments, and many times the creditor will note "no payments made" which is in agreement, and you are not in default- but it makes it look late and that can hurt you. Pull your credit regularly to make sure they do not report it incorrectly- it is a bi*ch to Fix!!!
Sep 24, 2009 @ 07:10:42
I put your question to the experts using my Financial Helpline which is one of the many benefits members of the Financial Freedom Society enjoy. Here is their answer:
—————–
If you have a good credit rating and can refi your student loan to get a lower interest rate without having to contact a number of creditors, it is probably a good idea and will not have a significant impact on your credit score. Refi activities, typically, are only a small component of the credit scoring calculation. You can review discussions and suggestions on debt refinancing, credit scoring, and related topics at the following websites, which discuss the credit score components:
* 35% punctuality of payment in the past
* 30% capacity used: the ratio of current revolving debt (credit card balances, etc.) to total available revolving credit (credit limits)
* 15% length of credit history
* 10% types of credit used (installment, revolving, consumer finance)
* 10% recent search for credit and/or amount of credit obtained recently":
http://www.debtsmart.com/pages/article_refinancing_and_credit_score_030212334.html
http://en.wikipedia.org/wiki/Credit_score#Makeup_of_the_FICO_score
http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre03.htm
http://moneycentral.msn.com/content/CollegeandFamily/Moneyinyour20s/P73746.asp
http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx?fire=5
http://www.myfico.com/CreditEducation/CreditScores.aspx?fire=5
-Financial Helpline Counselor
—————————-
The Financial Helpline is just one of the many benefits available to members of the Financial Freedom Society. FInd out how to get your own membership by visiting http://your.ffsi.com/59173.
Warm regards,
Darren J Smalley
Independant Membership Consultant
Financial Freedom Society
http://www.ffsi.com/59173
"A Financial Health Club"