Once you’ve graduated college and landed your first professional job, your essential first step toward getting your personal finances into tip-top shape is to pay down your high-interest student loan debt. Cutting your loan interest rates as much as possible by refinancing your loans is a smart move that will likely accelerate you toward that goal.
What is Credible?
Credible is like the Google Flights of the student loan refinancing world—a comparison tool allowing college grads to check refinance interest rates from top lenders in seconds.
Their marketplace includes offers from Citizens Bank, Earnest, College Ave, iHELP, Massachusetts Educational Financing Authority (MEFA), and Rhode Island Student Loan Authority (RISLA). They also offer private student loans.
According to Credible’s analysis of their users’ data collected over a 17-month time period spanning 2015–2016, those refinancing through them save an average of $18,668 throughout the life of their new loan and reduce their interest rate by an average of 1.71 percentage points (1% = 1 percentage point).
Credible doesn’t charge any fees for using their service. They make money with commission if you pursue a refinance offer from your search results. Those institutions also generally don’t charge fees.
Effect on Credit
Lenders generally perform a soft credit inquiry/”pull” to determine initial rates, but if you choose to apply for a loan, a hard inquiry into your credit history is performed. While soft credit pulls don’t affect your credit, hard credit inquiries may decrease your FICO Score score by up to five points and your VantageScore by 10–20 points, according to Heather Battison, Vice President of Consumer Communications at TransUnion.
While they appear on your credit report for two years, hard pulls impact your credit scores for one year.
This factor is also important to keep in mind when applying to multiple lenders to compare interest rates. FICO and VantageScore Solutions have different techniques of identifying when you’re rate shopping, using scoring formulas that consolidate several loan inquiries performed during a certain time frame into one. While FICO rolls all hard inquiries within a 45-day window into one, VantageScore Solutions only does so for those within a 14-day window, so it’s best to keep rate shopping within the confines of a two-week period to minimize damage to either score.
You can rest assured that your data is secure, as they employ bank-grade encryption and secure sockets layer (SSL) technology. Specifically, they encrypt their data with public key cryptography algorithms with a minimum key size of 256 bits. For transmitting requests, they exclusively use secure server communications in the form of HTTPS. Data between your web server and theirs is protected with an extended validation 2048-bit SSL certificate.
They have a solid reputation and have made appearances in media from several major news outlets, such as CNN Money, The Wall Street Journal, The Washington Post, CNBC, and NBC News.