credit report tip

Just fyi for anyone thinking of consolidating student loans:

Make sure the old loans are in good standing before the consolidation.

The creditor will report the status of each loan as of the consolidation date. Any past due or defaulted loans will continue to be listed as derogatory for 7 years even though they’ve been paid in full and closed.

Consolidation closes the accounts without making them current, so your loan status is frozen…… for better or worse …..until death do you part….

Asking “what will this do to my credit?” or similar question, in no way ensures the student loan people will tell you all or any of the above

This may apply to any loan being paid in full/closed. I dunno, I’ve never lump-sum paid anything else on my credit report. I suppose if you can afford to PIF you can afford to make it current first, so it shouldn’t be much of an issue, just an extra step and extra time for the new status to filter through the computers and be reflected on the report.

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Posted on September 9, 2009, in Finance. Bookmark the permalink. Leave a comment.

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