How refinancing private student loans affected my credit score

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• To lower my monthly payments and get rid of my mom as a cosigner, I refinanced student loans.
• Because two of my Navient accounts were open, my credit score increased after the refinance.
• After those accounts were closed, my credit score dropped 12 points.

Since the beginning of last year, I have been on a credit-repair journey to help me bounce back from my credit crisis. past money mistakes.

I have affordable payment options in place for my credit card debt and I’ve been diligently paying my student loans. I also took the time to contact each of my creditors in order to transfer my debts from my. Name of the deadThe names transgender people and nonbinary people are given at birth. I want to change my name so that it can be used. Keep my credit reports up-to-date.

After increasing my score to 700, I was able to refinance my private student loan so that I could pay less monthly and get rid of my mom as cosigner.

Unexpectedly my credit score increased by 40 points

One Factors that impact your credit scoreYour credit history is how long it has been open. Experts say that a long credit history — meaning accounts in good standing that have been open for many years that appear on your credit report — may raise your credit score when coupled with on-time payments.

My oldest credit accounts are my student loans. They were opened between 2010-2014. Refinancing my student loan meant I would be closing my oldest credit accounts and reducing my credit history. So I expected my score will drop a few point.

A happy accident led to an increase in my credit score. I refinanced $67,000 of private student loans. This left $1,038 in my Navient accounts. I didn’t intend to leave any debts in Navient accounts. I just entered $67,000 in the refinance request because it was easier. My score increased 40 points due to the fact that my loans were paid by the refinance while the old accounts were not closed.

Apart from refinancing student loans, I also opened a bank account. A secured credit cardWith a $200 limit on my internet and phone bill. I pay them off in full each monthly. The student loan refinance payment and my new on time payment history have significantly raised my credit score.

My score decreased by 12 points in the next month

I knew credit bureaus would catch on to my changes and my 753 credit rating wouldn’t last. After refinancing student loans, I was awarded a journalism prize that gave me cash. That money was used to pay $332 of my remaining Navient account debt.

All four of my Navient accounts that were closed suddenly showed up on my credit reports in the same time period. My credit score fell by 12 points, just as I expected. 

My credit score will be improved by refinancing student loans

I know that my credit score will drop once I close my remaining Navient accounts. I am focused on the long-term, however.

After refinancing my student loans, my monthly payments went down from $670 per mois to $462 per lună. The monthly savings will help me make it easier to pay my student loans. If I have extra cash, I’ll also be able to contribute more to the principal balance. If my credit score is higher due to improved payment history, then I plan to refinance again to see what interest rates I can get.

I was emotional when I started my credit repair journey. I have learned to accept the credit rollercoaster and to use the seatbelt of my long-term strategy as a way to keep myself in control.