FICO and your Private Student Loan | 04.01.10

Posted in PLUS Loans, Private Student Loans By Student Loan Network Staff

If you have been looking for a private student loan, you might have come across the word FICO. Your FICO score, or your credit score, is basically a rating assigned to you based on your credit history. A good score can help you get a car, a house, and, yes, a private student loan. So what do you need to know about FICO?

For starters, you should get your free credit score online. Here you will be asked a little about your financial history and background. If you’re a prospective undergraduate, don’t be alarmed if your score is very low.

Chances are unless you have been living on your own or developed some kind of credit history (i.e. you regularly pay off credit cards, pay back loans, etc.), you won’t be eligible for a private student loan and will require someone with a higher rating to a cosign the loan with you.

If you have checked your FICO score recently, here is a general look at what the figure means:

  • 330 – 619: Odds are if you fall into this range you have either had a negative history or no history. If you want a loan, you will almost certainly need a co-signer.
  • 620 – 659: This is a bit of a tough area. You will likely need a co-signer for a private loan. If you are a parent, you might be eligible to apply for a Parent PLUS loan, which has a fixed interest rate and has lower requirements for borrowers.
  • 660 – 720: This is the range of average credit scores. Prime financing will be available to you, and you should be eligible for most loans at an average rate of interest.
  • 721 – 750+: This is an excellent credit rating. You will get the best interest rates and have your pick of lenders.

So what are these numbers based on? A majority of your FICO score is based on how consistently you make credit card payments and how much of your credit you actually use.  If you consistently use your credit card, but still carry a low balance (read: pay them off regularly), your score will be higher.


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10 Responses to “FICO and your Private Student Loan”

  1. Danielle says on April 30, 2010 at 7:40 pm:

    thank you

    Reply To This Comment
  2. valerie says on April 22, 2010 at 5:04 pm:

    This was informative!

    Reply To This Comment
  3. NOELLE says on April 20, 2010 at 1:19 am:

    WOW

    Reply To This Comment
  4. SNemo says on April 12, 2010 at 1:31 am:

    How often should someone check their FICO score? How often does it actually become available?

    Reply To This Comment
  5. kia says on April 11, 2010 at 3:16 am:

    Try not to apply for credit early in life if you really don't need it. Places like Capital One will try to get in when your 18 and that bad report can last on your credit up to 12 years.

    Reply To This Comment
  6. Lauren says on April 9, 2010 at 2:37 pm:

    Some employers also run a credit check before hiring. It's a good idea to check your credit reports for any errors that could be lowering your score.

    Reply To This Comment
  7. Sydney says on April 8, 2010 at 2:01 pm:

    It's never to early to start thinking about your credit score

    Reply To This Comment
  8. Patricia says on April 3, 2010 at 6:56 pm:

    Great Article!

    Reply To This Comment
  9. vince says on April 3, 2010 at 5:14 pm:

    I hope my future employer offers loan payoffs as a perk

    Reply To This Comment
  10. heather says on April 2, 2010 at 4:17 am:

    glad my credit score is above 750

    Reply To This Comment

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