Understanding credit fundamentals helps you determine your best options for getting much-needed financial-aid, so let’s examine the basics.Every credit related interaction you engage in has an outcome that affects your “credit rating”.

Community Q&A If you've watched TV or opened your mail lately, you know that there are plenty of companies eager to help you consolidate your loans to "cut your payments in half", "lower your interest rates", and "help you get out of debt fast".

Indeed, consolidating your high interest loans and credit card debt into a single loan with a lower interest rate and more manageable payments makes perfect sense.

Unfortunately, it doesn't always work out that way––many people who consolidate their loans end up paying far more than they would have otherwise.

And in the case of home equity loans, an alarming number of borrowers end up losing their homes.

Your “credit score” is the summation of all the credit outcomes you have created over the course of your borrowing history.

Credit “bureaus” are tasked with assigning numbers, or scores, to your overall performance.As you apply for certain student aid, your credit score is used by lenders to determine your worthiness for loans.Add to this the fact that many so-called "consolidation" programs aren't really consolidation loans at all, and debt consolidation, rightfully, has a bad reputation.Still, you may be able to benefit from consolidation if you explore your options and proceed with caution.Whether you like it or not, your credit history takes center stage when it’s time to plan your financial aid strategy.If you are a high school student, this may be the first time you’ve had to consider the importance of having good credit.