Equifax Scores Drop Because of Sallie Mae Reporting Error
On May 8, 2008, Sallie Mae erroneously reported delinquent payments for some of it’s student loan borrowers. As a result, one of the three reporting agencies, Equifax, proceeded to lower FICO credit scores for those handful of borrowers, even though there was nothing wrong and all payments were current. Some student loan holders reported that their FICO scores dropped as much as 100 points because of Sallie Mae’s technical mistake.
The problem originated in a technical translation error for graduated or extended repayment plans. These plans were marked as arrangements for partial payment and thus were adversely marked on FICO score reports.
Sallie Mae is working with Equifax to correct those affected borrower’s credit reports. Sallie Mae has also offered to give credit reference letters to those people who need it to rectify their credit before creditors and potential lenders. All the major credit bureaus have been notified of Sallie Mae’s reporting error.
