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Because there's no credit check required, federal loan consolidation doesn't affect your credit score. Keep in mind, though, that there's no way to get a lower interest rate through the federal consolidation program.

If you have a federal loan, you are eligible for loan consolidation after you have graduated or left school and have begun making payments. Students who have defaulted on their loans may need to cure the default first. The federal student aid website offers help for students who have defaulted on their loans.

Debt consolidation combining multiple debt balances into one new loan is likely to raise your credit scores over the long term if you use it to pay off debt. But it's possible you'll see a decline in your credit scores at first. That can be OK, as long as you make payments on time and don't rack up more debt.

Private education loans are not eligible for consolidation. Direct PLUS Loans received by parents to help pay for a dependent student's education cannot be consolidated together with federal student loans that the student received.

Consolidation means that your various debts, whether they are credit card bills or loan payments, are rolled into one monthly payment. If you have multiple credit card accounts or loans, consolidation may be a way to simplify or lower payments.

A debt consolidation loan is one way to refinance your debt. You'll apply for a loan for the amount you owe on your existing debts, and once approved, you'll use the funds to pay off your debt balances. Then you'll pay down the new loan over time.

It's a good idea if you have an assortment of loans that add up to more than $10,000 and you're having trouble keeping track of them. You can consolidate any federal loans you have after graduating into a single federal direct consolidation loan. You can also consolidate privately by refinancing student loans.