Credit Tip of The Week…Student Loans.
Student Loans…they are such a big part of our existence these days. They can help in so many ways, but also can hurt in equally as many ways. Not only can they end up taking forever to pay off, as they are growing with interest the entire time you are in school, they can harm the credit report also. The best thing you can do is first make sure you stay on top of getting the appropriate deferment or forbearance documentation to whoever is servicing your loans. I have seen countless times that Student Loans are being marked as being paid late, when in fact they should have been in deferment, but the proper docs were not sent in. Beyond that, the single most important thing one can do, is make sure all loans are consolidated at the earliest opportunity. Most student loans are issued on a “semester by semester” basis. So someone that only went to undergrad can have 8-12 different loans, by the time they are done. The confusion is that the loan servicer will typically allow you to send one payment and then they will make sure all loans get paid. But, #1 what it they make a mistake, or #2 what if you dont send a payment?? Rather than having one derogatory mark on your credit report, you will have….10-12 derogatory marks. See how much that can hurt?. So first opportunity, make sure your student loans are consolidated. Its typically pretty easy to do, especially if all loans are Government Loans. If you made the unfortunate decision of taking our privatized Student Loans, you may have more difficulty, especially if you try to consolidate them with your Government Student Loans. So another tip, stick to the Government Student Loans whenever possible.
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