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Knowing Your FICOŽ Scores Can Lead to Higher Scores!

, by Tom Quinn

FICO recently announced that more than 250 million consumer credit and loan accounts have free access to actual FICOŽ Scores used by lenders. Those FICO Scores are made available through our FICOŽ Score Open Access program.

FICOŽ Score Open Access is a service that provides consumers with regularly updated FICOŽ Scores as well as the most important factors affecting those scores. Participating institutions (banks, credit unions, card issuers, etc.) deliver the scores to consumers via a variety of channels, including online banking websites, mobile applications or paper statements.

That is quite an impressive number, so some industry pundits have questioned if individuals who check their credit score actually make more responsible credit and financial management decisions over time.

Recently released research findings based on Sallie Mae customers indicate that, yes, this is the case.   The study found customers who received quarterly emails from Sallie Mae about the availability of free FICOŽ Scores were 65 percent more likely to view their FICOŽ Scores, more likely to have increased their FICOŽ Scores after one year, and had fewer past-due accounts over time.

Based on a field experiment of over 400,000 Sallie Mae student loan borrowers, the research project also included survey data results about FICOŽ Score knowledge and general financial literacy.  The group of borrowers who were more likely to check their FICOŽ Score were more likely to accurately know and report what their own FICOŽ Score was.  Generally speaking, these individuals are more informed on how lenders actually see their credit risk (less likely to overestimate what their actual score is) and can use that insight to make better credit seeking decisions.

Know your score and understand the top factors driving your score to become credit empowered!

Additional information regarding the study and findings can be found in a recently released paper, "Does Knowing Your FICO Score Change Financial Behavior? Evidence from a Field Experiment with Student Loan Borrowers."

Tom Quinn

Tom Quinn is the Vice President of Business Development for myFICO and has over 25 years of experience working with consumers, regulators, and lenders regarding credit related questions and initiatives.