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Sallie Mae Reporting Incorrectly to Equifax, Dropping FICO Scores

This article was written by in Consumer. 6 comments.


If you have a loan serviced by Sallie Mae, there is a good chance that your FICO credit score dropped significantly recently. Consumers have identified an error in Sallie Mae’s reporting. Accounts in good standing have been flagged and notated with the wording, “Arrangements made with credit grantor to make partial payments.” Sallie Mae is reporting the your loan balance is fully due immediately and that your payments are behind more than 60 days.

This reporting error has caused FICO scores to drop about 150 points. This can be a pricey error for anyone planning to close on a mortgage. As of now, the error is isolated with Equifax, but Experian and Transunion may be affected as well.

If you have a loan with Sallie Mae, particularly if you opted for a “graduated payment plan” in which your total payments increase over time, I suggest taking advantage of your free annual credit report from Equifax right away and disputing any incorrect record.

Also contact Sallie Mae at 888-272-5543 if you believe they are reporting your loan information incorrectly.

May 14, 2008 Update. This story has been picked up by BusinessWeek and the Pittsburgh Post-Gazette. The problem at Sallie Mae affected an estimated one million customers. BankRate provides this information:

Sallie Mae is working with Equifax to correct borrowers’ credit reports. Credit scores should return to their standings before the drop within “the next day or so,” and any erroneous delinquencies resulting from the misinformation should be removed from the borrowers’ Equifax credit reports… All credit reporting agencies have been notified of the issue and consumers do not need to pull their credit reports if they have not already done so, nor do they need to dispute the error with the credit bureaus… They should call Sallie Mae directly.

MyFICO forum thread via a reader

Updated May 14, 2008 and originally published May 13, 2008. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 6 comments… read them below or add one }

avatar Victoria

Thank you for being one of the only people, as of May 13th, 2008, reporting on this egregious error. In these difficult times, building and protecting one’s credit is so important to all of us. This has caused many of us so much stress. I hope the news catches on and others take interest in this article.

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avatar Unbelievable

Thank you so much for alerting us all to this. It is completely irresponsible of Sallie Mae not to tell their customers about the error, I should not have to read about it on a blog. My FICO score dropped 120 points!!

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avatar Lenny

Eeek – I just happened to be browsing some other blogs and came across here. My fiance has consolidated her loans through Sallie Mae and we were just talking about going through the steps of getting prequalified to buy a house. This gives me even more reason for her to pull her credit report now rather than later. Thanks!

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avatar R.

THANK YOU!!! I have Equifax credit monitoring so I was shocked by what happened to me on Monday when my score dropped an insane amount!! Sallie Mae was not very helpful, referred to the Graduated Payment plan, but I am not ok with waiting until July when my payment plan changes!

I just called Sallie Mae again, and they are working with Equifax. If you have made all of your payments on time and have been making the correct amount, even on the Graduated Plan, then soon your credit score should go back to before.

It sounds like this was a problem with Equifax, not so much Sallie Mae.

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avatar XpressIng

Greetings:
I was alerted to a change in my score by my credit watch account. Upon accessing my account on the Internet I found that my credit score had dropped by exactly 114 points. After spending a great deal of time I was able to find someone at Sallie Mae and Equifax who gave me accurate information. I checked Experian and Trans Union. They were not affected. My score dropped Sunday night, May 11, 2008. I checked my score today and found they had corrected the problem and the score was back where it should be. I believe in situations like this there should be a better way for the creditor to communicate with the credit reporting agencies to corect such events. Some of you may have had your score and credit checked on Monday or Tuesday by your insurance company or similiar. Your insurance rates and other costs are associated very directly with your credit score. Check out your credit report and contact any creditor or service provider that may have accessed your credit while your score was lowered. Make sure they are aware of the error. You could find your insurance rates or similiar increase by a significant amount. That is all for now. :)

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avatar BJ

I have a Sallie Mae loan that was paid off, on time, in full 2002. Out of nowhere it is now showing derogatory as of 2004 as settled for less. A totally bogus reporting. It is showing up on Experian and Equifax. Experian advised me they do not take reciepts, certified or notarized documents, cancelled checks, copies of contracts, etc from consumers as proof to the contrary. Meanwhile my credit score is getting spanked. There is little enforcement of the laws in this regard. Libel is legal if you have enough money or are part of government.
I am working on getting this removed however I doubt they will.

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