Sallie Mae customers who check their credit scores regularly make better financial decisions and manage finances more responsibly, according to a just-released paper, “Does Knowing Your FICO Score Change Financial Behavior? Evidence from a Field Experiment with Student Loan Borrowers.”
The study found customers who received quarterly emails from Sallie Mae about the availability of free FICO Scores were 65 percent more likely to view their FICO\ Scores, more likely to have increased their credit scores, and had fewer past-due accounts.
Authored by Rourke O’Brien, University of Wisconsin-Madison, Tatiana Homonoff, New York University, and Abigail Sussman, University of Chicago, the paper reports on a two-year study of Sallie Mae private student loan customers who receive free access to their FICO Scores, a benefit the nation’s saving, planning, and paying for college company has offered since 2014 through the FICO Score Open Access program. Sallie Mae was the first national private education lender to offer free access to quarterly FICO Scores.
“Our findings demonstrate how knowing and tracking your FICO Score can improve decision-making and overall financial health, analogous to how the use of a Fitbit can lead to improvements in one’s physical health,” said O’Brien. “We are grateful to Sallie Mae and FICO for enabling us to conduct this research.”
“We are committed to helping customers manage their finances responsibly, and that includes giving them the information and tools they need to understand what a FICO Score is, why it is important to know it, and how maintaining a positive credit record affects many different aspects of their lives,” said Kelly Christiano, senior vice president, Sallie Mae. “We are grateful that this research Rourke, Tatiana, and Abigail conducted confirms the value those activities have on our customers’ financial well-being.”
