It is fairly common for college students to need financial assistance to help pay for their education. If you turned to student loans in your search for financing, you may have taken out several loans---all at different interest rates. If those loans happen to have variable rates, the interest rate on each loan can climb over time and leave you with significantly more student-loan debt. Consolidating your student loans into one loan with a fixed interest rate can lower your monthly payments and make the debt easier to pay off.
Instructions
1. Pull your FICO scores from Equifax and TransUnion. You can access your FICO scores directly from myFICO.com. These are the credit scores that a lender will look at when considering the interest rate you will be eligible for on a consolidation loan. Unfortunately, you cannot access your FICO score from Experian. Experian does not make FICO scores available to consumers.
2. Review your credit reports to determine if any information within your credit history is damaging your score. A 2003 amendment to the Fair Credit Reporting Act gives you the right to one free consumer credit report annually from each credit bureau.
3. Spend some time cleaning up your credit report if your FICO scores are lower than you would like them to be. A good FICO score is above 720. To qualify for the best rates, however, you should try to get your credit score above 760. You can dispute any incorrect information or any negative information that you do not recognize with the credit bureaus. In many cases, the credit bureaus will then remove the information and your credit score will improve.
4. Visit your local banks and credit unions to inquire about a fixed-rate consolidation loan for your student loans. Allow each institution to pull your credit score and give you a rate quote. Also request an outline of the terms and conditions of the consolidation loan in writing.
5. Compare the rate quotes and terms that you received from each bank and credit union. Choose the loan program that has the terms you want at a reasonable interest rate. Once you have chosen the right loan program, you may return to the lending institution and fill out a formal application for the loan.
Tags: your credit, FICO scores, interest rate, your FICO, consolidation loan