A solid income and a strong credit score are key if you’re looking to refinance your student loans.
But what exactly is a good credit score for student loan refinance?
In general, you need a credit score that’s at least in the range of 650 to 680 to secure a refinanced student loan. Any lower than that and you’ll have trouble finding a lender. However, if you want the best rates, you’ll need a score in the high 700s.
Continue reading to learn why credit score matters and the minimum credit score our refinancing partners require.
Why Does Credit Score Matter for Student Loans?
Credit score matters whether you’re signing up for a store credit card or borrowing thousands to pay for college. Lenders use your credit score to determine how likely you are to pay them back. The higher your score, the more likely you are to pay back your debt, so the less risky it is to lend to you.
Most lenders evaluate credit card and loan applicants based on their FICO credit score. Your FICO credit score is a three-digit number and ranges from 300 to 850.
A FICO score is based on five factors:
- Your payment history (35%)
- Your total debt (30%)
- Your credit history (15%)
- New credit/inquires (10%)
- Types of credit you have (10%)
The score is also broken into categorized ranges like this: Poor (300-579), Fair (580-669), Good (670-739), Very Good (740-799), and Exceptional (800-850).
Borrowers looking to refinance should aim for the good, very good, and exceptional range. The higher your credit score, the lower the rate you’ll likely get.
Minimum Credit Score Needed by Our Refinance Partners
To refinance with our vetted refinancing partners, you’ll need to meet their minimum criteria for refinancing. A big piece of that criteria is their minimum credit score requirement.
1. LendKey
Minimum Credit Score: 660
LendKey lets you compare several refinancing deals in one easy-to-use online platform. Simply input your information to get matched to deals from different banks and credit unions. LendKey looks for a minimum credit score of 660, but the typical LendKey borrower or cosigner has a credit score of 754. They also look for a minimum income of $24,000 per year or $12,000 per year without a cosigner.
With LendKey, borrowers enjoy flexible repayment terms, an autopay discount, and unemployment protection for up to 18 months.
2. Earnest
Minimum Credit Score: 650
Earnest helps financially responsible student and parent borrowers refinance their private and/or federal student loans. They require a minimum credit score of 650, but they don’t base rates solely on your credit score. Rates and term lengths are based on your monthly budget instead.
If you have a short credit history but a stable job, Earnest is a good pick. With Earnest, borrowers receive seven-day payment extensions, military deferment, and death or disability discharge.
3. CommonBond
Minimum Credit Score: 660
CommonBond works with borrowers who have at least a bachelor’s degree and a minimum credit score of 660. Students can refinance their own federal and private student loans and/or their parent’s Parent PLUS loans. CommonBond gives back when you refinance too. For every refinanced loan, CommonBond funds a child’s education in Ghana.
Other perks of refinancing with CommonBond include unique interest rate options, a responsive in-house customer service team, up to 24 months of deferment or forbearance, and cosigner release.
4. Education Loan Finance (ELFI)
Minimum Credit Score: 680
Education Loan Finance (ELFI) works with SouthEast Bank to offer refinancing solutions to students who have earned at least a bachelor’s degree. ELFI requires a minimum income of $35,000 and a minimum credit score of 680. You can see if you qualify in just two minutes.
With ELFI, borrowers enjoy no fees, military deferment for active duty military, and an in-house customer service team. Plus, you get paired with a personal loan advisor to guide you through the refinancing process.
5. CollegeAve
Minimum Credit Score: mid-600s
Along with requiring a credit score in the mid-600s, CollegeAve also requires a minimum income of $65,000 for solo applicants. If you don’t earn that much, you can apply with a cosigner. For married couples, applying with a spousal cosigner means you rate is based on your combined income instead of just yours. This gives you access to better rates.
With CollegeAve, borrowers pay no fees, receive an autopay discount, and work with an in-house customer service team.
6. Splash Financial
Minimum Credit Score: 700
To refinance through Splash Financial, you must have a bachelor’s degree or higher, a minimum credit score of 700, and a minimum income of $42,000. If you don’t meet the last two criteria, you can apply with a cosigner and receive cosigner release after one year of on-time payments. Adding a spousal cosigner also means your rate is based on your combined income. Medical residents who choose Splash Financial pay only $1 on their refinanced student loans for up to 84 months.
Other perks of Splash Financial include bi-weekly payments via autopay, an autopay discount, an assigned representative, and no fees.
How Do I Check My Credit Score?
Now that you know what credit score you to aim for, you need to find out what your credit score is.
Anyone hoping to refinance should check their credit score with all three major credit reporting bureaus—TransUnion, Experian, and Equifax. It’s important to check all three because each uses its different methods to calculate your credit score. You can request a free report from each bureau every 12 months under The Fair Credit Reporting Act (FCRA).
Other places to check your credit score include:
- Credit monitoring services offered by Transunion, Experian, and Equifax
- Your bank or credit union
- Your credit card lender
Read the article, How to Check Your Credit Score and Why It’s Important to learn more.
How Can I Improve My Credit Score For Student Loan Refinancing?
Remember, the higher your credit score, the lower the rate you’ll likely qualify for. Barely meeting a lender’s minimum requirements won’t give you access to the best deals. Build your score up higher or add a cosigner with good credit so that you can refinance at a low rate with good terms.
Improve Your Own Credit Score
You can improve your credit score in as few as 30 days. All it takes is some diligence and good timing. Follow some of these tips to boost your score and gain access to lower rates:
- Negotiate late payments with your creditors and ask to have the late payment removed from your credit score. If it isn’t removed, it can negatively affect your credit for up to seven years.
- Review your free credit report and then contact the credit-reporting agency to dispute any errors you find.
- Pay extra on your credit cards, home mortgage, or student loans to reduce the amount of debt you owe. This will increase your available credit limits and boost your score.
- Call your credit card company and ask for an increased credit limit. Just be sure to request a soft inquiry because hard inquiry will appear on your credit report and hurt your score.
For more tips on improving your credit score, read the article, How to Improve Credit Score in 30 Days.
Consider Adding a Cosigner
If you’re unable to boost your credit score high enough, you can boost the credit score on your refinancing application by adding a cosigner with good credit. The lender will offer rates based on the cosigner’s credit and credit history. All our refinancing partners permit cosigners except for Earnest.
Make sure you and your cosigner are on the same page when you choose a refinancing deal. If you fail to make payments, your cosigner is on the hook. LendKey, CommonBond, and Splash Financial all offer cosigner release after a set number of on-time payments—a policy that can make you cosigner feel more comfortable. ELFI and CollegeAve do not offer this perk.
Final Thoughts on Credit Score for Student Loan Refinance
Refinancing your student loans can save you money, free up your monthly budget, and help you get out of debt sooner. It works best when your credit score is high enough to get you a low-interest rate and good loan terms. Don’t rush into refinancing though. Take your time evaluating your options, building up your credit score, and choosing a new loan that will help you accomplish your goals.
