Some borrowers that have sallie mae student loans were shocked last week when they checked their credit report with Equifax, only to find that their credit scores have dropped. Some of the borrowers were delinquent, and some were not.
Here is what happened
Last Thursday May the 8th Sallie Mae made a error in the way some student loans were reported to the credit bureau. They reported graduated or extended repayment plan as arrangements for partial payment. This caused Equifax the biggest and oldest credit bureau to code the accounts as delinquent, even if they were current.
An extended payment plan allows the borrower to pay the loan out over 12 to 30 years. The standard plan usually is in repayment over 10 years. A graduated payment plan starts out as a low payment, and gradually increases every two years over a term of 12 to 30yrs.
“ There are some repayment plans that on our system are considered a partial payment. They are still in current status, but they are essentially for an extended or graduated repayment plan, and with our understanding of these industry guidelines on how to code that is where we made an error,” Says Martha Holler, spokeswoman for Sallie Mae. “
Borrowers with extended or graduated repayment plans who applied for credit or pulled their credit scores in the last three business days may have had “one or more of their accounts show up late, and had a negative impact on their credit scores,” Says Tom Joyce, spokesman for Sallie Mae
Some students that had these types of loans complained in the FICO forums that their FICO scores had dropped a total of 100 points because of this mistake.
Joyce says ” less than 10 percent” of their 10 million borrowers, or less than 1 million borrowers were affected by this mistake.
Action being taken
Sallie Mae plans on working with Equifax to fix this problem with borrowers who’s credit reports were affected. These errors will be deleted from the Equifax, and the borrower’s credit score should return to the scores they were.
Meanwhile Sallie Mae said they would provide letters to those that need them. Sallie Mae urges borrowers concerned about this mistake to call (888) 272-5543
This is a great reason to pull your credit report; you never know when a creditor is going to make a mistake. Current statistics show that 80% of credit reports have errors on them.
Get your free credit score report today !
This article was wrote: by www.bankrate.com
Mike Clover is the owner of http://www.creditscorequick.com/. CreditScoreQuick.com is the one of the most unique on-line resources for free credit score report, fico score, free credit check, identity theft protection, secured credit cards, student credit cards , credit cards, mortgage loans, auto loans, insurance and a BlOG with a wealth of personal credit information. The information within this website is written by professionals that know about credit, and what determines ones credit worthiness.
