Looking for a reason to be happy about borrowing money from Sallie Mae? Sallie Mae, one of the country’s largest private student-loan lenders, recently announced that it will offer new private student loan borrowers their quarterly FICO credit scores for free.
If you’re not familiar with the FICO score, it’s a specific credit score that is used in making major credit decisions for people who are applying for mortgages or other types of loans. FICO scores normally are not free and they can only be obtained from certain places. The credit scores that you can buy from places like Equifax or Experian or the ones you can get for free from websites like Credit Karma are just estimates of your credit score – they are not the “real” FICO score that lenders use to make credit decisions. In short, the FICO score is the important one.
Ironically, this move by Sallie Mae in providing quarterly FICO scores to new private student loan borrowers can be seen as a way of reminding you of what you stand to lose if you end up not paying on your student loans – your good credit standing.
In addition to the FICO score, Sallie Mae also will be providing information to each borrower on what went into calculating their credit score, as well as frequently asked questions and answers about credit scores. Many people are completely unaware of the various factors that go into determining their FICO scores, so this information is a pretty useful addition.