Student loan refinancing

I'm thinking about refinancing my student loan, but I am the only one in the house employed at the moment and want to be super careful about my credit score. If I take out a new loan but pay off the old one (meaning I'll have the same amount of debt, not more), does getting a new loan still impact my credit score

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  • Moved to Discussions>Student Life by April - YNAB Team - 10/26

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  • April - YNAB Team I think this belongs in Managing Debt, actually 

    What matters to your credit score is the hard pull the refi company will do when they give you the line of credit. Most of the scoring models treat 1 hard pull per six months as okay, and 2 or more as a problem. The rest of your credit score should remain pretty similar since your total debts will remain around the same. 

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    • Tan Major - I agree! Managing Debt didn't exist at the time, but I've moved it there now. :-)

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    • Tan Major (faac422e1003) Could you explain what a "hard pull" is a little more. I was also considering refinancing my loans - I'm currently 5-6.5% on a total of 42,000

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  • One way to do it... is when you refinance your home.

    I did a refinance at 3.5% and included cash out to pay part of my student loans

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  • According to Google - A hard pull is a credit scoring term that describes an initial step taken by lenders in evaluating consumers' loan applications.The potential lender checks the consumer's credit report, which creates a small negative impact on the consumer's credit score. 

    Essentially your credit takes a ding by the fact that your lender checks it to make sure you are in good standing to receive additional debt.

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