One hundred and fourteen points in a single month — That’s the fastest credit score jump that Nathalie Noisette has seen in working with hundreds of credit-weary clients.
If you’re a student loan borrower looking for a speedy credit recovery, you might be wondering how to raise your credit score by 200 points, and how long that might take. The details will vary from person to person, but below are some simple steps to take, as well as how long you can expect the process to take.
The short and unsatisfying answer is that it depends on your situation.
If you walked into Noisette’s office — she founded consulting company Credit Conversion in 2013 — she would tell you to expect a yearlong recovery.
Jeanne Kelly, another credit coach for hire, agreed, contending that your timeline will vary significantly, depending on whether you’re looking to thicken a bare credit file or improve a poor one.
If you suddenly pay off your maxed-out credit cards and correct errors on your credit report, you might expect a 30- to 60-day turnaround, Kelly said.
On the other hand, if you’re new to the world of credit or have a long history of student loan delinquency, it would take significantly longer, probably closer to Noisette’s estimate.
“I always [say], just like a wound, time heals your credit report,” Kelly said.
Knowing that the road to a 200-point increase might be longer than you hoped, here are five steps to start moving in the right direction:
You might already be familiar with your three-digit credit score, but reviewing your credit report is more critical. A cleaned-up report often leads to a better score.
Kelly recommended accessing your report at least twice a year so that you can correct any mistakes as soon as possible. You can obtain one free copy of your report per year from the three major bureaus — Experian, Equifax and TransUnion — via AnnualCreditReport.com.
To avoid identity theft, consider freezing your report, which will limit who can see or use it without your say-so. Note that you might need to unfreeze it, perhaps at a nominal cost, whenever applying for new credit, such as a refinance of your education debt.
Noisette’s 114-point success story was made possible, in part, by disputing errors on her client’s credit report.
“During an investigation, credit bureaus must validate that the debt is actually a consumer’s debt,” said Noisette, who started her company after improving her once “beyond poor” credit.
It’s possible that your federal loan servicer or private lender misreported your student loan payments or failed to close out an old debt.
“Errors on credit reports happen all the time, identity theft is a real thing and credit bureaus are legally obligated to prove you owe [what] is reported you owe,” she said. “If the burden of proof isn’t met, the negative item affecting your score must come off.”
To remove errors from your report, you’ll need to write a dispute letter and include supporting evidence of the mistake. The Federal Trade Commission provides a template letter to serve as a foundation.
You might find yourself pining for a 200-point increase to your credit score because you fell behind on payments to creditors or lenders in the past. After all, a single late payment has been known to drop a credit score by 80 or more points, according to the National Association of Certified Credit Counselors.
Getting back on track can help you make big strides toward raising your score. That shouldn’t come as a surprise, as payment history accounts for more than a third of your FICO score, the most common credit scoring method.
Once you get up to speed, ensure you stay there. If your most troublesome debt is your outstanding student loans, for example, look into repayment plans that help you more easily afford your monthly dues.
The second biggest lever you can pull to improve your credit involves FICO’s “amounts owed” category — also known as credit utilization — on revolving credit like credit cards.
Even if you can’t zero your balances, you would be better off minimizing them. Noisette’s client, for example, repaid his balances until he hit the 29% mark of each credit card’s total available credit.
“Each trade line you have begins to be affected [adversely] if you use more than 30% of the available credit,” she said. “We choose 29% to stay below the threshold.”
Say you have a $10,000 credit limit on your favorite piece of plastic. If you’ve charged $5,000, you have a 50% utilization. By repaying $2,100 — thereby reducing your usage to $2,900 or 29% — you could improve your score significantly.
Another strategy to nudge your credit utilization in the right direction is to increase your credit limit — just make sure you don’t also increase the amount you owe.
If you have enough cash to pay off a credit card completely, don’t rush to cut it up and close your account. After all, another 15% of your score’s makeup is the length of your credit history. By canceling that card you’ve had since college, you could significantly shorten your average history length.
Similarly, refinancing your student loans could temporarily ding your credit, at least in a minor way, because your new lender effectively pays off your original student loans and replaces them with a single new loan for the same amount. Keep in mind, though, that refinancing could put you in an even better position to improve your score in the future.
Steps 3 and 4 might not have applied to you if you have a short credit history and few accounts. The simple strategy for beginners is to start using a credit card on routine expenses you know you can afford, then repay it all each month to zero out the balance. This can help you avoid interest charges and any dings to your burgeoning credit score.
Although there are ways to build credit without taking on debt, you might also consider taking on another form of credit, such as a credit builder loan, to speed up the process.
Adding an installment loan to your report would address the “new credit” (10%) and “credit mix” (10%) categories of your FICO score. Six to 12 months of prompt payments on a loan for as little as $100 could increase your score from 15 to 100 points, according to the Credit Builders Alliance.
If you already have a student loan in repayment and listed on your credit report, however, borrowing another installment loan is less likely to improve your credit. Your priority should be to keep making full and on-time payments toward your education debt.
A top-notch credit score is a real money-saver. The next time you explore student loan refinancing, a home mortgage or another form of borrowing, you’ll find that an improved score will net you a lower interest rate.
More good news: You have the tools at your disposal to DIY your credit cleanup.
“The strategies to getting your credit improved are pretty straightforward,” Noisette said. “Consumers would benefit from educating themselves about how credit works, then leveraging all they know about credit to improve [and then] maintain their score. Knowledge is power.”
Interested in refinancing student loans?Here are the top 9 lenders of 2022!
|Lender||Variable APR||Eligible Degrees|
|1.74% – 8.70%1||Undergrad & Graduate|
|1.74% – 7.99%2||Undergrad & Graduate|
|1.74% – 7.99%3||Undergrad & Graduate|
|1.89% – 5.90%4||Undergrad & Graduate|
|1.74% – 7.99%5||Undergrad & Graduate|
|2.05% – 5.25%6||Undergrad & Graduate|
|1.86% – 6.01%||Undergrad |
|N/A7||Undergrad & Graduate|
|1.99% – 8.38%8||Undergrad & Graduate|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount
The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.
To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of May 4, 2022.
2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.
Student Loan Refinance Interest Rate Disclosure Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years 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%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Let us know if you have any questions and feel free to reach out directly to our team.
3 Important Disclosures for SoFi.
Fixed rates range from 3.49% APR to 7.99% APR with a 0.25% autopay discount. Variable rates from 1.74% APR to 7.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.
4 Important Disclosures for Laurel Road.
Laurel Road Disclosures
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.
Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.
Interest Rate: A simple annual rate that is applied to an unpaid balance.
Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of April 29, 2021. Information and rates are subject to change without notice.
5 Important Disclosures for Navient.
6 Important Disclosures for LendKey.
Refinancing via LendKey.com 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 LendKey.com. 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 LendKey.com 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 educational 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 5/17/2022 student loan refinancing rates range from 2.05% APR – 5.25% Variable APR with AutoPay and 2.49% APR – 7.93% Fixed APR with AutoPay.
7 Important Disclosures for PenFed.
Fixed Rate Loan Terms: 5 years/60 monthly payments, 8 years/96 monthly payments, 12 years/144 monthly payments or 15 years/180 monthly payments. Annual Percentage Rate is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed rates range from 3.29% to 5.43% APR. Rates are subject to change without notice. Fixed APR: Fixed rates will not change during the term. This rate is expressed as an APR. Since there are no fees associated with this loan offer, the APR is the same percentage as the actual interest rate of the loan. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
8 Important Disclosures for CitizensBank.
Education Refinance Loan Rate Disclosure: Variable interest rates range from 1.99%-8.38% (1.99%-8.38% APR). Fixed interest rates range from 2.99%-8.63% (2.99%-8.63% APR).
IS Variable Rate Disclosure: Variable Rates advertised are based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of December 1, 2021, the one-month LIBOR rate is 0.09%. Variable interest rates will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree and presence of a co-signer. Your final variable rate may be based upon the 30-day average SOFR index, as published by the Federal Reserve Bank of New York. The maximum variable rate is the greater of 21.00% or Prime Rate plus 9.00%.
ERL Variable Rate Disclosure: Variable interest rates are based on the 30-day average Secured Overnight Financing Rate (“SOFR”) index, as published by the Federal Reserve Bank of New York. As of May 1, 2022, the 30-day average SOFR index is 0.29%. Variable interest rates will fluctuate over the term of the loan with changes in the SOFR index, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable interest rate is the greater of 21.00% or the prime rate plus 9.00%.
Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer.
Lowest Rate Disclosure: Lowest rates are only available for the most creditworthy applicants, require a 5-year repayment term, immediate repayment, a graduate or medical degree (where applicable), and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Rates are subject to additional terms and conditions, and are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer. Borrowers should carefully review federal benefits, especially if they work in public service, are in the military, are considering possible loan forgiveness options, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision on our website including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.