Refinanced from Navient to SoFi - Credit Effects on Average Account Age and # of Accounts?

[Anonymous]

An unintended effect I picked up today on another thread is my account age.

When my 10+ year old Navient accounts close what will happen to my average account age? Also the number of accounts will be fewer. I had 10+ loans under Navient (all above 6%+ interest rates which increased in the past 2-3 years) and consolidated to just below 6% with SoFi Mohela as the servicer. The thing is now it's just one loan.

So how much will I get dinged? I have about 7 credit cards with 10% utilization and about 30k CL but my oldest card is only since maybe 2016. I have a personal loan as well. So I'm going from about 26 accounts to probably 16 at best. And average age of credit may go from 15 years to lower (only my Fed loans weren't consolidated because the interest on those are about 4% or lower).

I have a 749 Experian which will probably go down to 700 because I applied to the new credit cards and opened a lot of new credit. But would it go down even further due to the reduction in average age of accounts and number of accounts? But at the same time could that be cancelled out in that the number of loans decrease (which has been a factor in me getting declined for credit in the past)

[calyx]

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@Anonymous wrote:

An unintended effect I picked up today on another thread is my account age.

When my 10+ year old Navient accounts close what will happen to my average account age?

Nothing - Closed accounts generally stay on your report for up to 10 years after they are closed.  They continue to be factored into your FICO scores. 

Also the number of accounts will be fewer.
No, the account number will not go down.  You will have fewer open accounts, but not fewer accounts as closed accounts will not go away.
This is actually better than closing credit cards, because loans utilization is not a large factor in FICO

So how much will I get dinged? I have about 7 credit cards with 10% utilization and about 30k CL but my oldest card is only since maybe 2016. I have a personal loan as well. So I'm going from about 26 accounts to probably 16 at best. And average age of credit may go from 15 years to lower (only my Fed loans weren't consolidated because the interest on those are about 4% or lower).

You will be dinged because your Age of Youngest Account is going to be 0 because of your new SOFI loan.
Your Average Age will drop a bit after factoring in your newest account, but whether or not you get dinged will depend on whether it causes your AAoA to cross any threshholds

I have a 749 Experian which will probably go down to 700 because I applied to the new credit cards and opened a lot of new credit. But would it go down even further due to the reduction in average age of accounts and number of accounts? But at the same time could that be cancelled out in that the number of loans decrease (which has been a factor in me getting declined for credit in the past)

Due to the drop of your AAoA by the new accounts? Possibly.   But your older Navient loans (especially since you have so many) may buffer that drop (or prevent it entirely).
Number of closed accounts will have no effect since you still have revolvers and installment accounts reporting.

I'm speaking from a FICO standpoint - I have no idea what it will do to your Vantage scores - they don't seem to count closed accounts, but they are also rarely used for lending decisions (if at all).

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[Anonymous]

Thanks Calyx so it seems I don't have much to worry about on the AAOA!

[calyx]

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@Anonymous wrote:

Thanks Calyx so it seems I don't have much to worry about on the AAOA!

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Yup!  That should be safe!

[Anonymous]

Bumping this as I have an additional question: SoFi has informed me they sent the check to Navient. I'm trying to avoid paying May's bill since that would be a double payment (them paying it off and me paying the regular payment). However, they may not cash the check until end of the month (5/31). I can't seem to get a straight answer from Navient but will call them on Friday to confirm - That is the date the rep told me I should check in to see if they received it and it posts to my account.

Bill is due 5/22. I just don't want them to report it late. One rep told me it shouldn't be an issue because they don't report until it's 45 days late but I'm just not convinced... The first rep told me to pay no later than the 27th.

[calyx]

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@Anonymous wrote:

Bumping this as I have an additional question: SoFi has informed me they sent the check to Navient. I'm trying to avoid paying May's bill since that would be a double payment (them paying it off and me paying the regular payment). However, they may not cash the check until end of the month (5/31). I can't seem to get a straight answer from Navient but will call them on Friday to confirm - That is the date the rep told me I should check in to see if they received it and it posts to my account.

Bill is due 5/22. I just don't want them to report it late. One rep told me it shouldn't be an issue because they don't report until it's 45 days late but I'm just not convinced... The first rep told me to pay no later than the 27th.

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If this were me, I'd make that extra payment.    When I made my extra payment (also not sure if it was going to be done on time), I had my money returned.    Better safe than sorry!

[Anonymous]

The thing is it may not be returned to me. They could just return the over-payment to SoFi and I would get nothing. I could definitely use the extra cash right now. For now I will just ride the tight rope and call them on Friday to see what's up. The check was sent last Thursday. Keeping my fingers crossed.

[Anonymous]

In case you haven't been refunded yet...

I refinanced my Navient loans with Earnest. I made an extra payment to Navient to be sure a payment was made by the due date. Navient sent me a check for my overpayment within a month. The overpayment will not be credited to SoFi, it will go to you

[Anonymous]

They ended up recieving the check and it posted right on the due date reflected in my account. Navient just posted a PIF to my credit report so I'm finally clear and free of their BS! I must have got lucky as they said it would take longer. That extra $$$ really helped keep Vacation CC debt low!!!