SoFi and the failed art of refinancing, or how not to design your fintech customer experince.

Back in mid-October, I decided to refi my graduate student loans, they are federal, and were taken out to attend ESADE, a school that ranks relatively high on the global rankings scale, boasts Javier Solana as its faculty, and Ramon Laguarta (CEO of Pepsico) as its alum. Suffice to say it’s a good school.

So in order to get a financial leg up, I figured lets refi. I went through all the bells and whistles, compared rates, read reviews, spoke with folks who had refinanced and eventually decided to go with SoFi. I submitted my paperwork, SSN, K1s, 1065s, etc. etc. etc.

SoFi’s customer rep said everything was in order and looked good. Great, I thought. But it wasn’t until a few days later that she informed me that I was rejected solely because my graduate institution is not a Title VI school. Wait, WTF?

This is a problem. I can understand that lenders will have their own criteria, and that’s fine. But SoFi needlessly, negatively impacted my credit score by pulling a hard credit report. They knew ESADE wasn’t a title IV school but did not bother to check or inform me that it wasn’t a qualifying institution. Instead, they dinged my credit, nothing else.

Soon thereafter I sent a letter to their support team, cc’ing Anthony Noto, their CEO. He and I have contacts in common on LinkedIn, and usually reaching out — gets at least a response. Here’s much of the email.

Dear Anthony,

I think you would benefit from hearing about my disappointing experience attempting to refinance my student debt with SoFi.

Although SoFI’s representative led me to believe that I am a qualified candidate and proceeded to run a hard credit report, she later informed me that I was rejected solely because my graduate institution is not a Title VI school. This is a problem.

As SoFi needlessly, negatively impacted my credit score by pulling a hard credit report, I ask that you remedy this either by reconsidering my application or by contacting the credit bureaus to remove the inquiry from my credit report. More detail to support my request is below, though any reasonable person can see why my experience merits redress and why my story should raise a red flag to you about your customer experience.

SoFi had “disqualifying” information about me before you pulled my credit score, so it is incredibly concerning that the process advanced to this point. If SoFI disqualifies applicants solely based on whether the loans to be refinanced supported an education at a Title IV school, then SoFI should have disqualified me. You did not need my credit information.

I could not have prevented this myself, as it is not clear on your website that an applicant must be refinancing a loan taken to attend a Title IV school in order to be eligible. SoFi merely says that an applicant is eligible if they attended a Title IV school (which I did for undergraduate). Your website does not make clear that an applicant must have attended a Title IV school and must also be seeking to refinance debt incurred to attend that Title IV school. So even assuming that your average person is versed enough in Federal Law governing education loans to know what it means for a school that they got Federal loans to attend is a Title IV school, your eligibility criteria are not clear.

This is bad for both you and your potential applicants, as it can only lead to a negative experience. Let people be disappointed with your choice to limit your refinancing offering to loans obtained to attend Title IV schools without also pulling their credit, obtaining personal and confidential information about them and negatively impacting their credit scores unnecessarily. This is simply bad process and bad business.

There is a clear opportunity to improve your processes. I went through SoFi’s prequalification feature, input all information and had a conversation with your representative. She even asked me for further information about my graduate school (including a picture of the diploma), but never raised to me that it may be a concern. Apparently your policies did not require her to bottom that out before pulling my credit score.

It’s a shame, because SoFi does seem to care about its applicants and members and this is apparent in how your representatives interact. The woman I worked with was both warm and service oriented. It’s also a shame that this personal touch cannot be extended to review some of the hard lines you draw around eligibility criteria. As your institution knows, I have an excellent credit score, went to top schools and have run my own successful company for five years. My experience with SoFI was completely avoidable and there is no reason it should have unfolded in this way or to my detriment.

I look forward to hearing from you.

Kindly,

This was October 24th, since then — Silence. SoFi has decided to ghost me.

What I guess I’m trying to get at here, is that this has been an all around really bad customer experience (CX). Pre-qual was great, and really optimized to convert the user for the sake of SoFi, but anything that stepped out of those bounds was completely disregarded.

This is problematic, because, the importance of customer experience cannot be overlooked, especially when dealing with serious matters, like a person’s finances or credit.

Not only does bad CX expose the company to reputation risk, but has the possibility to negatively affect a person’s credit through negligent design.

Additionally, companies should own up to their fuck ups. Honesty, is so important in building brand trust. Take my example above, a simple message from support stating that they have tried to remedy this, or providing me a list of reasons why it’s impossible to remedy their mistake would have gone a long way. Instead, I find myself writing this Medium post, irked. :/

UPDATE: The day I posted this SoFi contacted me, said they received the email to the CEO, and that they’re sorry, but they still can’t refi the loan, but that they’ll see if they can remove the ding on my credit. The following day, or maybe a day after that, they email me stating that they’ll be reaching out to credit agencies to remedy this.

Thanks for doing the right thing SoFi. :)