Sallie Mae will offer free FICO credit scores to student loan borrowers whose loans are disbursed for the 2014-2015 academic year, the company announced June 26.
Each borrower will receive a FICO score quarterly, along with a personalized list of the most influential factors determining the score. Sallie Mae is the first national private education lender and student loan servicer to offer scores through the FICO Open Access program (the program offered to Discover credit card holders and others), according to a news release from the company.
The idea is to help borrowers understand how credit scores work so they practice responsible financial behavior and enjoy good credit as a result. Eligible Sallie Mae borrowers will also have access to credit score education and frequently asked questions about credit.
Like all consumers with loans or revolving credit, it’s important for student loan borrowers to monitor their credit, because a single missed payment or credit report error can damage your credit standing and make it more difficult to secure affordable financing tools in the future. It’s especially important for borrowers to stay on top of student loan payments, because failure to pay may result in fees, wage garnishment and poor credit. Student loans typically cannot be discharged in bankruptcy, so falling into a hole of repayment troubles can be extremely difficult to escape.
Tracking your credit helps you understand the impact of your present-day financial decisions on your future. For example, you may notice your credit score is stagnant, and you use a lot of your available credit. This information allows you to figure out the importance of keeping your credit card balances low in relation to your overall credit limit, and making and following plans to do so should result in credit score improvement as you progress. Perhaps you have a habit for applying for new credit cards as offers come in every few months — checking your credit score may show you those applications shave points off your credit scores, especially if you apply for a lot of credit in a short period of time.
The FICO Open Access Program is one of many free ways you can access this important information about your financial habits. You can also get monthly updates on your credit scores and personalized tips on how to improve your credit standing by reviewing your credit data for free through Credit.com.
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