Does consolidating student loans hurt credit

In turn you would pay off the lump sum likely at a much lower rate than say what your credit card company is offering.In turn, however, your home could be on the line if you default.Debt consolidation may be an option you’re considering in order to regain some solid footing, but it’s important to note how this move can impact your credit worthiness and score.Will it lend a helping hand or kick you when you’re down? While the basic principle behind debt consolidation – taking debts and combining them into one, hopefully more manageable debt – is essentially all the same, there are different ways to go about it.

35 percent of your score is determined by payment history: whether you pay on time and whether you have had bankruptcies or judgments against you. 15 percent is determined by the age of your credit history.Your credit score goes down if you charge close to the maximum amount of credit available to you.So if you have two credit cards with a 0 limit and charge on each, your debt-to-credit ratio may be lower than if you have one credit card with a 0 limit and you charge 0 on that card.When you’re ready to give debt consolidation serious consideration, be sure check out Ready For Zero’s debt consolidation tool. Debt consolidation through a debt relief company or bank usually entails this third party negotiating for lower payments or rates on your behalf, sometimes capitalizing on relationships they have already established with your creditor.If credit card debt is what you’re struggling with, then this type of debt can be consolidated through a balance transfer onto a new card with a low APR, or perhaps a 0% APR during an introductory period.