Your credit score may be docked a few points when you apply for refinancing if you apply with different lenders over a long period of time. If you submit full applications with different lenders over several months, your score can plunge several points because each lender will do a hard credit check of your credit history. Read more about how to refinance student loans with bad credit.
You can avoid incurring multiple hits if you apply within a 14-45 day ‘shopping period’.
Keep in mind that before you submit a full application, you’ll be able to shop around and compare rates and loan terms from refinancing lenders. The lenders will do a soft credit pull during this process, which doesn’t hurt your score. Only when you decide to move forward with an offer and submit a full application will the lender’s underwriting team do a hard credit inquiry.
Your score may also take a slight hit if you’ve already made several years of student loan payments before refinancing. The credit scoring models calculate the average of how long all your accounts have been open. The longer you keep credit accounts open without missing payments, the better its impact on your score.
Learn More: How to Get Rid of Student Loan Debt
A hard inquiry will drop your score by five points or less, according to FICO.