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What Credit Score Do I Need to Refinance My Student Loans?

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Posted on August 18, 2019
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While credit scores aren't checked for private student loans, you'll certainly have your score and credit history pulled up throughout the loan refinancing process with a private student loan lender. Even if you don't have a credit score, or have a credit score that's not where you want it to be, you still have some options to help you get approved for refinancing such as taking on a co-signer for your application or working to improve your score in the months before you apply to refinance your student loans.

Your credit affects how and where you can borrow money for your student loans or how you refinance student loans with a private lender. Refinancing your student loans is a great way to reduce the monthly interest rate on student debt as well as potentially lower your monthly loan payments and even shorten your repayment term.

If you want to get a federal student loan, you won't need a credit score

If you are deciding whether to take on federal student loans or private student loans as a first-time borrower, it could make more sense to try to max out on as much federal student debt as possible, especially if you can snag a loan with subsidized interest payments.

Since federal direct undergraduate loans don't require borrowers to have some sort of a credit history or a co-signer, there won't be a soft pull on your credit when you apply for an application. Federal student loans may also offer lower interest rates depending on where the interest rate market cycle is at the time you decide you need financing for your education, and also offer various useful and convenient income-driven repayment plan benefits and forgiveness options.

When you consistently make payments on your federal student loans, this actually can help you build your credit history, but your score won't typically show up with one of the three credit bureaus until after about 6 months of paying your federal student loan.

All you need to get approved for a federal student loan, is U.S. citizenship as well as certain enrollment requirements. Eligible noncitizens may also receive federal student financial aid and state grants in certain situations.

To get started on your federal student loan application, you can easily and quickly submit a FAFSA online for free. This can help you receive other forms of financial aid such as work-study.

Private lenders typically look for a co-signer or a credit history

If you've decided that you can get a better interest rate with a private lender or have already maxed out your federal student loans for the year, you'll need a credit score and usually a solid one to qualify with most private student loan lenders.

Usually, you'll need a credit score in the mid-600's or at least around a 670-680 based on a FICO scale. However, even if you don't have a credit history, or have a score that's lower than what your private student loan lender is looking for, you can still get a co-signer with solid steady income and a strong credit score to help you qualify for the private loan. Essentially, if you're placed in the position where you can't make your student loan payments, the co-signer will take on the burden of repaying the loan for you.

Most private student loan lenders require a cos-igner or solid credit. For student loan borrowers who have high income-earning potential but possibly a lower credit score than they would like, many private lenders will still take you on, especially if you are pursuing a lucrative graduate degree. However, all else equal, a student loan that doesn't require a co-signer, compared to a private student loan that does, will require the borrower to pay a higher interest rate in order to compensate the servicer for additional individual credit risk.

What credit score do I need to refinance my student loans?

For individuals who have already taken out student loans, refinancing your student debt can potentially help save you thousands or even tens of thousands of dollars in interest over the course of your loan, by reducing your interest rate. In order to refinance your student loan, you typically need good or excellent credit history in order to qualify for refinancing. Many lenders usually have minimum credit score requirements of around 650 out of 850.

If your credit score is better than 650 and you have a job which provides you with stable income, you can most likely qualify for a lower interest rate. If you're not sure you can get approved to refinance your student loans due to your credit or income profile, you can try to get a co-signer to assist in the application process.

Having steady income and a solid credit history is key when it comes to refinancing your student loans. Additionally, a low debt-to-income ratio will also help. For student loan refinancing, many lenders will usually look for a debt-to-income ratio of less than 40%-50%.

Is the minimum credit score attainable?

The majority of minimum credit scores that are necessary for student loan refinancing are attainable for most consumers, considering that over 70% of Americans have credit scores above 650, while almost 30% of the population are in the FICO score range of 750-799. These statistics imply that 70% of U.S. consumers have credit scores that would allow them to meet minimum requirements to refinance their student loans, and it's most likely just a matter of time until you get there as an individual borrower.

Other credit score factors and how to improve my credit score

If you believe you don't make the cut to refinance your student loans based on minimum credit score requirements set by your refinance lender, you can quickly build up your credit score in 3-6 months by following several key tactics:

Maintaining a low credit utilization ratio

Credit utilization usually accounts for around 30% of your credit score, and this ratio compares your credit card debt to the amount of credit your lenders have you approved for. The general rule of thumb is that your credit utilization ratio shouldn't exceed 30%.

Credit Utilization compares your credit card debt to the amount of credit available. This means if you have a $10,000 limit on all your credit cards, try to keep your monthly expenses to no more than $3,000. If you're trying to lower your credit utilization ratio, ask your credit card company to increase your limits while you're spending less.

Reducing your new credit applications

If you apply for a new credit card or auto loan, you'll typically have a hard inquiry on your credit. However, you're not expected to keep applying for a new line of credit anytime soon so the expectation is that you'll recover shortly.

A ton of hard inquiries therefore can hurt your credit score, as credit inquiries usually accounts for around 10% of your overall credit score. Student loan borrowers who are looking to refinance their education debt most likely shouldn't be opening new lines of credit 3-6 months before applying to refinance their loans. Additionally, an inquiry or two from more than one refinance lender counts as a soft inquiry but if you check your rate with multiple lenders at the same time, all your inquiries will count as a single hard pull, so it makes sense to shop around to get the best rate.

Consistent payment history

Your credit payment history accounts for around 35% to 40% of your overall score, and your recent history has a larger weight on your credit score than your older history. This means if you missed a payment a couple years ago but have paid on time ever since, your credit score should have recovered from that single missed payment. However if you recently missed a payment or two, your score will most likely see a dip.

Having a long length of credit history

While there's not much you can do to extend your credit history length, it's important to know that length of credit history usually accounts for just 15% of your credit score. Additionally, if you have 3 credit cards and opened the first one 7 years ago and the other 2 over the past couple of years, even if you don't use the first credit line you may most likely want to keep it to have as old of a credit history as you can when applying to refinance your student loans.

Here are some of the best refinance lenders

Variable APR

1Important Disclosures for Earnest

To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.

Earnest's fixed rate loan rates range from 2.98% APR (with autopay) to 5.89% APR (with autopay). Variable rate loan rates range from 1.99% APR (with autopay) to 5.74% APR (with autopay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms of 10 years or less. For loan terms of 10 to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 0.26% and 5.03% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of December 7, 2020 and are subject to change based on market conditions and borrower eligibility.

Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.

The information provided on this page is updated as of 12/7/20. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit, email us at, or call 888-601-2801 for more information on our student loan refinance product.

© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.

2Important Disclosures for CommonBond

Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. If you choose to complete an application, we will conduct a hard credit pull, which may affect your credit score. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.15% effective Jan 1, 2021 and may increase after consummation.

3Important Disclosures for LendKey

Refinancing via is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any education institution. Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810. As of 12/07/2020 student loan refinancing rates range from 1.99% to 8.56% Variable APR with AutoPay and 2.95% to 8.77% Fixed APR with AutoPay.

The team members at PeppyWallet pride themselves in finding and suggesting services and products that they believe are of high quality and have the potential to positively change a student loan borrower's financial circumstances. We may earn an advertising fee or sales commission when we recommend various services and products to you, which is how we maintain our site and education platform. Be sure to read the fine print to help you understand your product's or service's terms and conditions. PeppyWallet is not an investment advisor or lender, and is not involved in the investment or loan approval process, and does not make investment related or credit decisions. Any terms and rates which are listed on our website are our latest estimates but are subject to change at any time, and we cannot guarantee that they are up-to-date.