Student loans are a type of installment loan, similar to a car loan, personal loan, or mortgage. They are part of your credit report, and can impact your payment history, length of your credit history, and credit mix. If you pay on time, you can help your score.

Why did my credit score go down when I consolidated my student loans?

The main explanation for a drop in credit score is due to age of credit. The longer the credit history, the better a credit score. When consolidating or refinancing the old loans are paid in full. This means that those lines of credit are marked as closed.

How does debt consolidation affect your credit score?

As you roll revolving credit debt into a debt consolidation loan, and if you keep your balances on those accounts low, this can help to reduce your credit utilization and in time help boost your credit score.

How does a student loan affect your credit score?

Borrowing money to pay for your college education is a common occurrence. Just like with a car or mortgage loan, you are responsible for paying off your debts, interest included. Being a loyal installment payer, you will build a good credit score. This will make you more eligible for future loans and credit card applications.

How does closing a revolving credit account affect your credit score?

Closing revolving credit accounts will increase your overall credit utilization ratio —which will impact your credit scores. It is important to make sure that your credit counseling organization makes all payments for you on time.

What happens if you miss a student loan payment?

As a result, missing just one student loan payment can result in multiple delinquencies appearing on your credit report. So, it is very important to make every payment on time. Often, student loans will be transferred from one lender to another.