Sallie Mae's Mistake

[Jun 12, 2008.]

 

In this financial market it is hard to keep a good credit score especially when one of the nation's lending agencies makes mistakes.

Sallie Mae is the leading student loan institution in the United States and has recently made a minor error but one that affected quite a number of people. Grant it that only 10% of the 10 million borrowers were affected by the error, the number is still significant enough to cause a great amount of alarm.

Only borrowers who used the Graduated-payment loans were subjected to Sallie Mae’s blunder. This type of loan allows borrowers to pay only a portion of the total loan for a few years sometimes just the interest. The problem came with Sallie Mae mistakenly reported those types of loans as delinquent. Only Equifax received the reports from Sallie Mae which cased significant damage to these reports. Many have claimed that due to Sallie Mae’s error their credit score plummeted up to 81 points which is a difference between a good score and a bad score.

The credit reports are used by credit card companies and lenders to determine how high interest rates will be. Such a drop in scores leads to increased interest ratequifaxes and can have a long lasting negative effect. Sallie Mae has since corrected the problem and sent notices to Equifax of their mistake which has corrected the credit scores of those borrowers.

Only Equifax was affected by the mistake.

Borrowers will still want to check their credit reports to make sure Equifax has updated. Under the Sallie Mae account the note will read “Arrangements made with credit grantor to make partial payments” indicates that you were indeed affected. Get in contact with Equifax immediately to dispute the mistake.

This incident has made many realize how important it is to check credit reports annually. These credit reports are available for free once a year but can be purchased as well.