MINNEAPOLIS — With student loan debt climbing by significant
rates, are potential buyers who arrive in the showroom with high education repayment
obligations going to have problems getting a vehicle loan?

FICO examined the issue because officials said more lenders
and investors are asking how this is affecting U.S. consumers' credit scores.

Looking at a large data sample from a credit reporting
agency, FICO found that 6.2 percent of U.S. consumers had two or more open
student loans on their credit report in 2005. By 2012, analysts discovered that
number grew to roughly 11.8 percent.

FICO acknowledged consumers have a greater amount of student
loan debt today. In 2005, consumers with an open student loan on file had an
average student loan debt of $17,236. In 2012, that number increased 54 percent
to $26,549.

Meanwhile, analysts noticed that auto debt demonstrated an
opposite pattern as the average vehicle loan balance stood at $5,829 in 2005,
but ticked down to $5,562 this year.

FICO insisted more consumers are shouldering a greater
amount of student loan debt today. The firm found that the percentage of
consumers with student loan debt above $100,000 has more than tripled between
2005 and 2012 from 0.2 percent to 0.7 percent.

"To put this in perspective, about 1 million more consumers
have student loan debt above $100,000 (assuming 200 million scorable
consumers)," analysts explained.

Does carrying high student loan debt mean that a consumer's
FICO Score is destined to be low?

"Our research demonstrates that this isn't the case,"
analysts replied

"In fact, people can have good scores despite having high
student loan balances," they continued. "Approximately 7 percent of consumers
with at least $50,000 of student loan debt have FICO Scores in the 800s.

Analysts recapped exactly how student loan debt is factored
into the FICO Score:

—A student loan receives no special treatment by the FICO
Score; it is treated like any other installment loan. The score doesn't employ
any variables that specifically evaluate student loan data.

—It makes no difference to the score if the student loan is
backed by the government or a private loan from a lender.

—Whether a student loan is deferred has no impact. Deferred
loans, if reported by lenders, are considered by the algorithm and can have a
positive, negative, or no impact on the score, depending on what other credit
information is present.

"It's important to note that while student loan debt can
factor into the FICO Score, credit card debt has a larger influence," analysts
stated. "That's because we've found that credit card indebtedness has a
stronger statistical correlation with future borrower performance than
installment loan indebtedness."