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Mztwinzs

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Consolidating student loans
I am thinking about consolidating my students loans. On my credit report my student loans are my longest running credit history (over 13 years). I plan on consolidating with the same company that currently holds the loans. What I want to know is will the 13 years be null and void or will it still show this is my longest running loan? I'm just trying to figure out if this will put a ding on my credit and look like I closed my longest standing account? Any help is appreciated.

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I was just in the same situation. I had a student loan trade line from 2001 and just opted to do a Direct Consolidation Loan of everything. The main reason for me doing it was I needed to take advantage of the new repayment plans available. Because of my circumstances, I chose the REPAYE Plan. But as to answering your question, when the old loan closes, provided it is a positive trade line, it will still continue to report for 10 years from the date it is closed. So, by the time it falls off your report, it will be 23 years old, by which time you'll have established other 13+ year old accounts to take its place. Now, this is one main difference between FICO scoring models and FAKO scoring models, like VantageScore 3.0. FICO scoring models (at least the current ones, calculate your Average Age of Accounts (AAoA), which includes closed accounts. So, as far as FICO scoring goes, having the trade line closed won't affect your AAoA. On the other hand, VantageScore 3.0 calculates Average Age of Open Accounts AAoOA, so closing the account could cause quite a drop in your AAoOA if you don't have a thick credit file. But, the good news is, no creditors that I know of use VantageScore 3.0 or any of the FAKOs for lending decisions. So don't worry about AAoOA. What are you more likely to see a ding in your FICO score is from opening a brand new loan; a new loan will lower your AAoA (and your AAoOA for that matter). But I don't expect it will be a massive drop and should rebound quickly. I think your priority concerns are choosing a Consolidation Loan repayment plan that best suits you and then take advantage of whatever interest rate reductions, rebates, or debt cancellation plans might be available to you. Also, FICO scores "care" more about bankcard and credit cards, that is revolving credit, than it does installment loans like cars and student loans. I mean, it cares if you are making late payments, but if you want to build your credit score, then having 3-4 bank cards that you use responsibly will do far more for your score than anything else will. I'll conclude with a biased opinion. You said you were going to stick with the same loan servicer. My previous servicer was Sallie Mae/Navient and they put me through living hell for the last decade. I chose a new servicer (Great Lakes) and everything has been smooth as silk  with them, although I only did the consolidation last month. Good luck to you!

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Mztwinzs

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I had no idea until know on how to find if someoe ever responded to my post. Thank you for your response and this is very helpful infomation!

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