Info regarding your credit score!!

I wanted to share some information regarding student loan applications and a student's or parents' FICO score!! See below

'IS APPLYING FOR STUDENT LOANS REDUCING YOUR FICO SCORE?'

In credit score calculations, applying for new credit makes up 10 percent of your FICO score. Anytime a creditor or lender pulls your FICO score to determine creditworthiness and interest your FICO score is reduced due to the inquiry. According to myfico.com, “looking for new credit can equate to higher risk.” Ten percent doesn’t seem like much and for the consumer with an average credit score one inquiry will lower their FICO score five points. However, it is the consumers with little credit history or a lower FICO score that experience a greater impact.

If a consumer wants to shop around for the best loan, why should he be penalized for looking for the best deal? Myfico agrees and states when shopping for mortgages, car loans, and student loans, inquiries made in the 30 days prior to scoring will be ignored. If you find a loan within the 30 days, the inquiries won't impact your credit score while you're rate shopping. According to Jill Richardson, Scoring Project Manager for FICO, consumers should not be worried that inquiries from private or alternative student loans will reduce FICO scores if the inquiries are made within the 30 day time period.'

This is good news for your students, so I thought I would share this at this time.


This came from a colleague of mine who works for NSLP (National Student Loan Program)