NEWARK, Del.--(BUSINESS WIRE)--Sallie Mae, the nation’s saving, planning and paying for college company, along with FICO, the predictive analytics and decision management software company, today announced the release of a free handbook to help college students and young people understand and effectively manage credit. Sallie Mae and FICO’s Understanding Credit Handbook is a primer on credit, providing resources and information designed to help those who are just beginning to establish a credit history.
Available at SallieMae.com/FICO, the Sallie Mae and FICO Understanding Credit Handbook outlines the credit basics, including simple-to-understand definitions and explanations for types of credit, credit history and credit scores. The Handbook goes in depth on understanding and establishing a FICO® Score, providing information on the factors that make up a FICO® Score and how they are calculated and used by lenders. Sallie Mae and FICO also offer information on obtaining and monitoring a credit report.
“Consumer financial education is critical for everyone, particularly young people who are just entering the world of credit,” said Jim Wehmann, executive vice president of Scores at FICO. “This handbook is a tremendous resource for students and families who are taking on the significant responsibility of paying for college. We are proud to partner with Sallie Mae on the handbook, and we are excited to have Sallie Mae in the FICO® Score Open Access program, which provides free FICO Scores to millions of consumers.”
Additionally, the Handbook provides insights from Sallie Mae and FICO on financial literacy and maintaining good credit health, including:
- Creating a budget: Creating a budget is helpful in managing and controlling expenses. Sallie Mae has a downloadable monthly budget worksheet that can help students and families stay in control of finances during college.
- Managing Accounts: Managing student loans, auto loans, credit cards or other revolving credit responsibly can help credit scores. Avoiding high balances, and making on-time payments is key.
- Paying on time: Staying current on accounts is critical to building a solid credit history. Late payments and collections can have a big impact on a FICO® Score and paying off a collection account or closing an account with a previously missed payment will not necessarily remove it from the credit report.
- Monitoring Credit Scores: It’s a good idea for consumers to check and monitor their FICO® Scores regularly and especially 6-12 months before applying for a loan. In addition, consumers can request free copies of their credit reports every year through AnnualCreditReport.com.
“We hear about the importance of understanding credit and maintaining a good credit score every day, and many people, especially those just beginning to establish a credit history, may benefit from more information and education,” said Charlie Rocha, senior vice president, Sallie Mae. “That’s why we’ve partnered with FICO to provide this simple, straightforward guide to help young people make informed credit decisions whether they are taking out a student loan, applying for a credit card, auto loan or home mortgage.”
To better inform customers and help them make responsible financial decisions last year, Sallie Mae began providing its student loan customers free quarterly access to their FICO® Scores. Today, students receive their FICO® Score quarterly after their eligible student loan has been fully disbursed. The company was the first national private education lender to provide this benefit as part of FICO® Score Open Access and plans to expand the program to all customers and cosigners later this year.
When it comes to paying for college, Sallie Mae recommends families following this 1-2-3 approach: first, maximize money that does not need to be repaid, such as scholarships and grants; second, explore federal student loans; and, third, consider a responsible private education loan.
Sallie Mae (NASDAQ: SLM) is the nation’s saving, planning, and paying for college company. Whether college is a long way off or just around the corner, Sallie Mae offers products that promote responsible personal finance including private education loans, Upromise rewards, scholarship search, college financial planning tools, insurance, and online retail banking. Learn more at SallieMae.com. Commonly known as Sallie Mae, SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.