Even when you are applying through the same lender, you are basically taking out a new loan each semester or year.Each of those loans is a separate account, so it is standard practice for students to have multiple loans reported in their history.Instead of making multiple payments to multiple lenders, the borrower only has to pay off the new consolidation loan, says Michelle Pezzulli, vice president of operations for Credit Union Student Choice, a student lending service provider in Washington, D.C."That new loan will have its own interest rate; it will have its own repayment terms; it will have its own terms and conditions," she says.
Your credit report shows a history of all your accounts, even after they are paid off or closed.
For some people, the progression of using credit to build a solid history for making large purchases such as buying a home begins with an auto loan.
Applying — and getting approved — for a credit card is a very simple process, but getting approved for a car loan is a bit more difficult.
There are a few ways to escape this paradox, such as acquiring a secured credit card or getting a loan from a credit union.
However, utilizing student loans is perhaps the easiest way for young people to build and establish a solid credit history.