*new error in Sallie Mae reporting* WTH happened - why is FICO contradicting itself? Please help!

[Anonymous]

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@Anonymous wrote:

My husband has several Sallie Mae private student loans and just pulled his score...dropped 120 POINTS! He is on the phone with them right now. The lady in India is telling him that he cannot switch back to a Level payment plan from the graduated plan and stating that the info they are reporting is correct to the credit bureaus that being on an extended payment plan is indeed "making arrangements for partial payment". UHG! So he asked to be transferred to a supervisor. This is rediculous. I also just submitted a news tip to CNN. I think we need to blanket the media with this and let them know what is going on.

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Sallie Mae is not stupid...we all know the subprime mortgage market issues have been filtering down to the student loan market. This is the best way to protect themselves. We'll either pay up or take the hit to our credit scores...which none of us are about to do. I've already called them and switched back to the level payment plan - they can fix it/not fix it - I don't care. I only saved what amounted to a tank of gas every month anyway.

[Anonymous]

Contacting local newspapers and CNN is a bit extreme if you ask me. Sallie Mae is aware of the problem and are working on correcting it. I ordered my credit score from the other credit agencies and they are NOT being affected by this.

The only reason to change to the level plan is to remove the language that equifax interprets as a reduced payment plan, Sallie Mae is NOT requiring people to change their plans in order to correct their credit scores...

I was told this will be fixed this wee by someone at Sallie Mae's Consumer Advocacy hotline. I truly believe this to be a technical glitch, not some veiled attempt to extort money from its customers...in fact, raising the payment to a level plan makes the loan LESS valuable to Sallie Mae, so how do you reconcile that...

I'm not defending Sallie Mae, this is an inexcusable error on their part, however making leaps of logic and getting everyone all hysterical is not going to help at all.

Message Edited by delfonic on 05-12-2008 12:17 PM

[Kit]

My FICO just drop 80 points today. Thanks Sallie Mae.

Just spoke with Consumer Advocacy at Sallie Mae. Was told that it'll be "fixed" in next week, but the credit bureaus might take 3-4 weeks to updated it. They said it was in their right to send the credit card bureaus the description "Arrangement made with credit grantor to make partial payments" because I was paying interest only the first 2 years of my repayment plan, even though I now paying off both interest and principle.

Hello! I've been paying off the principle for many years already. They don't admit any mistake and they offer no apology. They screwed up my credit score and I have to live with it for at least another month. Hopefully it'll be corrected next month.

Message Edited by Kit on 05-12-2008 12:34 PM

[Anonymous]

I just spoke with Adele at SM 888-545-4199 X6547.  She explained it was a reporting snafu and that a new tape would be submitted to Equifax by the end of the week to remove the negative description  on the reports indicating a payment plan is in place.  Based on the plummeting of scores, I asked if the scores would increase by the same number.  She did not know.  Thought I would share.

[Anonymous]

When they remove the notations the scores should rebound the exact amount they dropped. However there more than likely will be other regular changes that could also add or subtract next reporting date. So you may see your score come up the same - higher - just a bit lower than the same. But yes, if you lost -70 you would get the +70 back.

[Anonymous]

Sallie Mae informed me earlier that they will change the method they reported to the credit agencies this month by Friday, however said it will likely take several  weeks before it is reflected on our reports. They also said they can't be sure this type of error won't happen again. That is unacceptable! I too have contacted the media because I am applying for a mortgage this Wed. and my 760 credit score is now down to a 630. For many people this "glitch" won't hurt them but in my case I may not be able to purchase the property that I have spent months searching for. Because there are likely   others who will be similarly impacted, Sallie Mae needs to be held accountable. If nothing else, the media exposure will let financial institutions know what is going on so they can take that into consideration when granting credit to people like myself.  

Message Edited by corinne1981 on 05-12-2008 01:14 PM

[Anonymous]

Perhaps a mod can update the top the thread with some of the info we know.

Here's what I think we know pretty clearly so far (please correct me if you think I'm in error):

1) SM has admitted this was a mistake

2) This affects all SM customers with reduced payments plans other than 'Level'

3) SM is aware of the issue and intends to fix all affected accounts with an update to EQ and Innovis by the end of this week, with a disclaimer that it may take until the beginning of next week to appear

4) SM has claimed that they are doing this because either they have the option to or are required to report loans in this way now, due to some new rule/regulation

5) They intend to correct this in the future with a proper coding

Open Questions:

1) What recourse do people who had their credit pulled this week (with possibly adverse effects) have?

2) What exactly is the rule/regulation that caused this?

3) What does SM intend to put our CRs in the future? How will this affect our FICO scores?

4) Are other lenders affected by this?

Personally I think it's not necessary to switch to Level repayment right now. Whether you do or not, you're going to have the code removed from your CR at the end of this week and not sooner. But, it remains to be seen what they intend to do in future (open question 3).

If we can answer some of these open questions, it might be clearer what's we're fighting, if anything, other than a mistake.

[RAISEUP]

- 51 point decrease. I have sent a news tip to CNN as well. To the gentleman that posted saying that was overkill, you obviously have no idea what it takes to maintain a clean profile, but that's another story. Can we move this to a sticky and I propose we detail the steps needed to clarify the situation.

So far, from what I have been reading:

1. Access and print your EQ credit file, prior to this reporting description "Arrangements made with credit grantor to make partial payments
Student loan . Keep a copy of both for your records in case you are in the loan process.
"

2. Contact the Customer Advocacy department at http://www.salliemae.com/about/corp_leadership/management/advocate.htm

At this link you should be able to send an email or call to speak with someone who is familar with the error. So far Lorraine and Donna's name has come up as being aware and assisting.

3. A few people have stated that changing to level one repayment plans may speed up the process.

(This may put some at a financial disadvantage so be sure if this is applicable)

These steps are all that I have seen in response to the situation so please if you have any additional helpful information add to it.

Good luck.

Raisedup.

[Anonymous]

This is nothing more than an unethical business practice on the part of Sallie Mae. I have filed a complaint with the BBB and suggest everyone else do the same. For them to say that they can and will do this again is just crap. The graduated payment plan was a plan they offered to everyone as part of their service.

http://welcome.bbb.org/

[Anonymous]

I think the larger issue here (for the future at least) is what rights exactly does Sallie Mae have? Putting a comment on our credit reports that we are paying less than the original amount seems fine. But when that comment is coded showing at least 60 days delinquent in the month (which will show up month after month after month) is not right. The payment plan that we chose were offered in the beginning, we did not call them up asking to temporarily reduce payments. They are two totally different scenarios and Sallie Mae really needs to understand those differences.