Your One Stop Resource for Saving Money.
Information to Help You Consolidate Student Loans - The Bills.com Blog
Bills.com Blog > Loans Questions > Consolidate Student Loans
Information to Help You Consolidate Student Loans
Tuesday, Jul 15, 2008
Question: Hi, I am trying to consolidate 3 private student loans that in total value $10,000. My credit score fluctuates between 735 and 690. I have no co-signer to use. I have been denied a consolidation loan because of the high proportion of debt to annual income. Any advice on how to increase my chance of approval? Perhaps I should only consolidate 2 out of the three loans?
Answer: Consolidating your student loans, especially private student loans, can be difficult given the tight credit markets currently plaguing the U.S. economy. In recent months, it has become more difficult to obtain any loan, be it a mortgage or a consolidation loan, especially if the potential borrower has less than perfect credit. However, I encourage you to continue to shop around for a lender that will assist you in consolidating your loans, as some companies are still willing to assist consumers like you with mid-level credit ratings. If you enter your contact information at the Bills.com Savings Center , we can have several providers of consolidation loans contact you to discuss your options. I also invite you to visit the Bills.com student loan page, to read more about repaying loans and financing education in general.If you are still unable to find a lender willing to assist you in consolidating these loans, you may need to take some time to work on your credit rating before you consolidate, as your credit profile seems to be the major impediment to consolidating at this time. I think that if you are going to consolidate your loans, you would be better off waiting until you are able
to improve your credit rating and consolidate all three loans at once, as you will be able to obtain a better interest rate and loan terms than if you consolidated only two of your loans now.
There are several steps you can take to help improve your credit rating, but building and maintaining a good credit score requires diligent effort and a long-term commitment to financially sound living. First, you should obtain a copy of your credit report from each of the three major credit bureaus–Experian, Equifax, and Transunion. You can request free copies of your reports by visiting www.annualcreditreport.com. Once you have received copies of your reports, you should carefully review them to make sure that all listings, especially the listings appearing in the “derogatory” category, belong to you and are being reported accurately. Credit reports are notoriously inaccurate, with consumers frequently finding listings of derogatory accounts that never belonged to them or that were paid off years ago. If you find any inaccurate listings, you should dispute them with the appropriate credit bureau. The Federal Trade Commission provides a comprehensive guide to disputing items on your credit report. Clearing
There are several steps you can take to help improve your credit rating, but building and maintaining a good credit score requires diligent effort and a long-term commitment to financially sound living. First, you should obtain a copy of your credit report from each of the three major credit bureaus–Experian, Equifax, and Transunion. You can request free copies of your reports by visiting www.annualcreditreport.com. Once you have received copies of your reports, you should carefully review them to make sure that all listings, especially the listings appearing in the “derogatory” category, belong to you and are being reported accurately. Credit reports are notoriously inaccurate, with consumers frequently finding listings of derogatory accounts that never belonged to them or that were paid off years ago. If you find any inaccurate listings, you should dispute them with the appropriate credit bureau. The Federal Trade Commission provides a comprehensive guide to disputing items on your credit report. Clearing
up inaccurate derogatory accounts may significantly improve your credit score, depending on the number of inaccurate listings (if any) you find on your reports.
You should try to pay off any derogatory items that legitimately belong to you. While paying off these accounts will not make them fall of your report, it should improve your credit by reducing the amount of delinquent debt reporting to the bureaus and preventing the accounts from continuing to be reported as delinquent. Once you have dealt with you derogatory accounts, you should begin paying down your other accounts, to reduce your debt to available credit ratio. You can safely carry some debt, but carrying too much debt month to month demonstrates that you are financially strapped, and should not be extended more credit. Ideally, your ratio of debt to available credit should be no more than 33%.
To learn more about credit and strategies to improve your credit score, I encourage you to visit the Bills.com Credit Solutions and Resources page. I hope that the information I have provided helps you work toward consolidating your student loans and helps you Find. Learn. Save.
Best,
Bill
www.bills.com/blog/
You should try to pay off any derogatory items that legitimately belong to you. While paying off these accounts will not make them fall of your report, it should improve your credit by reducing the amount of delinquent debt reporting to the bureaus and preventing the accounts from continuing to be reported as delinquent. Once you have dealt with you derogatory accounts, you should begin paying down your other accounts, to reduce your debt to available credit ratio. You can safely carry some debt, but carrying too much debt month to month demonstrates that you are financially strapped, and should not be extended more credit. Ideally, your ratio of debt to available credit should be no more than 33%.
To learn more about credit and strategies to improve your credit score, I encourage you to visit the Bills.com Credit Solutions and Resources page. I hope that the information I have provided helps you work toward consolidating your student loans and helps you Find. Learn. Save.
Best,
Bill
www.bills.com/blog/
Also, make sure to get a free financial health check-up with Bills IQ!
Submit questions/comments about this post:
Bill has answered all sorts of questions and has been able to provide those in need of financial guidance with helpful and valuable advice and information on their specific financial area of interest. If you need specific guidance on any of the above mentioned financial areas, feel free to Ask Bill your financial questions and get better informed. Also, make sure to get a free financial health check-up with Bills IQ!
Information provided by Bills.com is for general informational purposes only and is not be
construed as legal, financial, bankruptcy, tax or other professional advice. Should you
require more detailed information or specific professional advice tailored to your situation you
should consult an attorney, financial planner or tax advisor.
While we believe all information provided by Bills.com to be accurate as of the date of its posting, we cannot ensure its accuracy. Use of this site and any information contained on or provided through this site is provided without any representations, warranties or guarantees. Bills.com is not responsible or liable for any decisions or actions anyone may take based on the information provided. Please see Terms of Use.
While we believe all information provided by Bills.com to be accurate as of the date of its posting, we cannot ensure its accuracy. Use of this site and any information contained on or provided through this site is provided without any representations, warranties or guarantees. Bills.com is not responsible or liable for any decisions or actions anyone may take based on the information provided. Please see Terms of Use.
© 2006 - 2009Bills.com LLC. All Rights Reserved.