topic Re: Refinance Student Loans - Effect on Credit Score? in Understanding FICO® Scoring

Refinance Student Loans - Effect on Credit Score?

Anonymous — Thu, 05 Mar 2020 20:30:17 GMT

I have an offer from Navy Federal to refinance my student loans. Variable rate as low as 3.14% APR. Fixed rate as low as 3.39% APR. What's my best strategy to keep the best credit score?

Leave the one for $3271.88 open to keep the credit history, refinance the others? (Otherwise my oldest open credit would be only 6 months.)
Refinance the loans that are 8%?
Fixed or variable?

I haven't been in a hurry to refinance because I have until the end of March and my student loans are currently on hardship forebearance. Obviously I will have to start paying again when I refinance.

FEDLOAN SERVICING

$11,085.75 - 3/25/2005 - 5%
$6,537.35 - 3/31/1986 - 8%
$3,245.74 - 2/3/1987 - 8%
$3,271.88 - 10/9/1986 - 8%

I appreciate any feedback.

EX: 780, EQ: 732, TU: 766

NFCU Auto Loan - $261/month
CREDIT CARDS:
Regions Bank - 6 mos - $750 (secured)
Capital Bank (OpenSky) - 5 mos - $200 (secured)
Navy Federal CU - 5 mos - $1500
Capital One Spark Business - New - $5000

Re: Refinance Student Loans - Effect on Credit Score?

donkort — Thu, 05 Mar 2020 23:09:03 GMT

I've refinanced my student loans a number of times.

It hasn't had much effect on my credit score.

I have $65,000 in student loan debt.

As long as you keep up with the payments, I don't foresee a great change in your credit score.

Re: Refinance Student Loans - Effect on Credit Score?

bettercreditguy1 — Sat, 07 Mar 2020 23:38:46 GMT

My thoughts would be to combine and refi. I would take the fixed interest rate choice because interest will increase sometime in the future. I would also keep paying the combined payments of all of the loans on the newer and lower interest loan to get it paid down.

Re: Refinance Student Loans - Effect on Credit Score?

Anonymous — Sun, 08 Mar 2020 01:58:53 GMT

Thanks. The fixed interest rate and the variable are almost the same, so it makes sense to take the fixed. But I'm thinking I should leave one open to keep the age of accounts high. Right?

Re: Refinance Student Loans - Effect on Credit Score?

donkort — Sun, 08 Mar 2020 13:39:56 GMT

Consolidation is the best approach. The age of your first student loan account would be used in the calculation of "account age."

I used to have four student loans on my report. Now, I have one.

Re: Refinance Student Loans - Effect on Credit Score?

Anonymous — Sun, 08 Mar 2020 13:43:03 GMT

But doesn't the age of accounts only calculate those that are open? Isn't that why they say not to close old credit cards?

Re: Refinance Student Loans - Effect on Credit Score?

donkort — Sun, 08 Mar 2020 13:48:26 GMT

It didn't matter to me. They keep the oldest date.

Make sure you ask them, when you consolidate, to keep your oldest account reporting.

As for me, they did that automatically.