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The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: fizkes/Shutterstock April 19, 2022 Dori Zinn has been a personal finance journalist for more than a decade. Aside from her work for Bankrate, her bylines have appeared on CNET, Yahoo Finance, MSN Money, Wirecutter, Quartz, Inc. and more. She loves helping people learn about money, specializing in topics like investing, real estate, borrowing money and financial literacy. Chelsea has been with Bankrate since early 2020. She is invested in helping students navigate the high costs of college and breaking down the complexities of student loans. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our loans reporters and editors focus on the points consumers care about most — the different types of lending options, the best rates, the best lenders, how to pay off debt and more — so you can feel confident when investing your money. Bankrate logo Editorial integrity
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. For many Americans, the high cost of student loans can delay plans of buying a home, saving for emergencies or putting money toward retirement. is one way to ease that burden, but borrowers with little financial history may find that route challenging. Private lenders check your credit score when you apply for refinancing, and many require you to have a credit score of at least 650 to qualify. Here’s what to know if you think that your credit score could hold you back. Lowest credit scores accepted for student loan refinancing
Since refinancing comes from private lenders, every loan servicer has its own credit requirements. However, in general, lenders want to see credit scores in the mid-600s. For instance, requires a credit score of at least 650, and ups that to 660. Your credit score is one essential factor in determining your eligibility, but it’s not the only factor. Some lenders don’t advertise minimum credit score requirements because there are other considerations, like your income and how long you’ve been making payments on your current loans. What credit score gets the best student loan refinance rate
Beyond determining your chances of getting approved for a refinance loan, your credit score also impacts the cost of that loan. If you have a credit score of 650, you may be approved — but you’ll also likely face the highest interest rates that the lender offers. If you have good credit, you can secure a lower rate that reduces both your loan’s monthly payment and the overall cost of the loan. In general, lenders see credit scores of 740 or higher as very good and those over 800 as exceptional. If you have very good credit, you can often qualify for the best rates. However, keep in mind that credit scores aren’t everything, and you’ll need to have solid income and a good debt-to-income ratio too. How to improve your credit score
The higher your credit score, the more likely you are to not only get approved, but also secure the lowest interest rate offered. Interest rates also vary by lender, so you’ll only better your chances of getting a good deal by before applying to refinance your student loans. Check your credit reports
Before your lender sees your credit score, you can check your reports with the top three major credit bureaus — Equifax, Experian and TransUnion — through . This lets you see what potential lenders will see: your past credit usage, if you’re responsible with credit and if you have any bad marks. If you notice any errors, you can report them to the credit bureau. Incorrect information could be reducing your score. By removing them, you can give your score a quick boost. You should also use any resources from your bank or credit card issuer; most give you access to your actual credit score for free. Stay on top of payments
Even if you’ve been struggling to make payments, you’ll need to be able to prove an on-time payment history with your current loans. Payment history makes up 35 percent of your FICO Score, so the more payments you make late — or miss — the more your score will drop. Keep your credit score as high as you can by making minimum payments when they’re due. Lower your credit utilization rate
Your credit utilization is how much of your available revolving credit you’re using. For instance, if you have a $6,000 credit limit and you’re using $3,000 of it, your credit utilization is 50 percent. Keep in mind that this goes for total utilization, not just per card. So if you have two cards with a $12,000 total limit and you’re using $3,000, your credit utilization is 25 percent. Credit utilization makes up 30 percent of your FICO Score. As long as you’re paying off your cards in full every month and don’t carry a balance, your credit utilization will stay relatively low. But if you do carry a balance, try to keep your credit utilization to 30 percent or less. You can also request a credit limit increase. If your card issuer approves it, you’ll get a quick reduction in your credit utilization. Take advantage of self-reporting
If your credit report is sparse, see if you can add some other accounts that are in your name. factors in accounts like your phone bill, utilities and even streaming services. Some services even let you . Limit new accounts
New credit is a necessary evil for your credit score. It makes up 10 percent of your credit score, which means that it’s a small but still important part of your credit history. But too many accounts can hurt. Every time you apply for new credit, your score takes a temporary dip. Along with that, applying to many different lenders at once brings down your average account age, which is also a factor in your FICO Score. How to refinance student loans with a bad credit score
If you have bad credit, you aren’t entirely out of luck when it comes to refinancing. Some lenders look at more than your credit score when you apply. For example, Earnest claims that in addition to the minimum credit score requirement, it considers your savings, education and earning potential to make approval decisions. Applying with a lender that broadens its eligibility criteria could help you get approved or get a lower rate. Getting someone to is also an option, especially if you have a credit score below 650. When you add a co-signer, their credit and income is taken into account for approval and rate decisions; for many people, a co-signer is the only way to get approved for refinancing with a bad credit score. Student loan refinancing alternatives
If you have stellar credit and can qualify for an interest rate that’s lower than what you’re currently paying, refinancing might be a great next step for you. But it’s not the right move for everyone. If you don’t qualify for student loan refinancing or you want to explore other options for managing your student loan repayment, consider these: Income-driven repayment plans: If you have federal student loans, you can explore . These base your payments on your income and household size. After 20 or 25 years, the remaining balance on your loans is forgiven. Your credit score doesn’t determine your eligibility for these plans like it does for student loan refinancing. Consolidation: If you want to move all your federal loans into one manageable payment, you can apply for a . Your interest rate is rounded up to the nearest one-eighth percent, so you won’t get a lower interest rate as you might through refinancing. But you also won’t lose the federal protections — like deferment and forbearance — that come with having federal student loans. Forbearance: is when you temporarily pause student loan payments without impacting your credit score. The federal government and some private lenders offer this option. You can check with your lender to see if you’re eligible for forbearance before applying. Learn more
SHARE: Dori Zinn has been a personal finance journalist for more than a decade. Aside from her work for Bankrate, her bylines have appeared on CNET, Yahoo Finance, MSN Money, Wirecutter, Quartz, Inc. and more. She loves helping people learn about money, specializing in topics like investing, real estate, borrowing money and financial literacy. Chelsea has been with Bankrate since early 2020. She is invested in helping students navigate the high costs of college and breaking down the complexities of student loans. Related Articles