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.