Comments on: Sallie Mae’s Screw-Up May Cost YOU Money

By: NLS

NLS — Fri, 16 May 2008 07:21:57 +0000

This happened to me! I pulled my score YESTERDAY and it was 611! It was 721 six months ago! I noticed the Salle Mae comment, disputed it, and have so far NOT gotten it resolved. I hope this turns around SOON!

By: Jason

Jason — Thu, 15 May 2008 15:37:32 +0000

Anyone have any issues where they have a completely unrelated credit card that retains the right to up their rate if the customer is delinquent in *any* credit account?

If you were listed as delinquent because of this screw up, I’d check with any other place you have credit with and see if they’ve upped your rate because of it.

By: Liz

Liz — Thu, 15 May 2008 02:02:19 +0000

I was quaking yesterday when I heard about this because I had just authorized a potential landlord to run a credit check as part of a rental application. Wouldn’t you know this glitch would strike on the one day in the last 2 years that anyone other than me looks at my credit? Fortunately they apparently don’t use Equifax for their their credit checks since my score came back at a healthy 797. And apparently I’m not on the Interpol Most Wanted list either. good thing too.

By: JenK

JenK — Thu, 15 May 2008 00:19:37 +0000

Nicstarling,

It’s very likely that this says more about Sallie Mae’s operations and quality assurance processes than about its financial difficulties. While it’s true that cutting costs can result in screwed-up operations, it’s also true that operations can be screwed-up for many, many other reasons.

There’s an old saying I learned my first day in tech support: “Never attribute to malice what can be adequately explained by stupidity.” Usually these sorts of things are poor execution, not an intentional screw-up (malice) or due to underfunding.

(I’m not saying it’s OK for Sallie Mae to do this, or that it’s not a valid reason to refinance away from SM if you can. Just that it says more about the SM’s ability to execute than SM’s finances per se.)

By: leigh

leigh — Wed, 14 May 2008 23:58:29 +0000

great. i might be calling the loan servicer (not sallie mae) for some of my original college loans and seeing if they’ll consolidate me once i graduate.

By: Trevor

Trevor — Wed, 14 May 2008 23:43:54 +0000

Coincidentally, I applied to refi an auto loan on 5/12 and my Equifax came in at 658… I didn’t get a good rate in return and was thinking I was going to have to spend days getting my Equifax report cleaned up.

After reading this story, I re-ran my Equifax report today… score = 772. That’s more like it.

Thanks for the tip! Looks like Sallie Mae/Equifax have fixed the issue.

By: nicstarling

nicstarling — Wed, 14 May 2008 23:25:19 +0000

MY friend has a student loan with Sallie Mae. A couple of days ago her parents, who cosigned the loan, called her at work because Sallie Mae called them to say she was overdue. She had actually paid online three days before the payment was due, but it wasn’t “processed” in time. Her parents were contacted the VERY SAME DAY the payment was due, because of their own error.

Something tells me Sallie Mae is in serious financial trouble or they wouldn’t be pulling stunts like this.

By: Mike Bahr

Mike Bahr — Wed, 14 May 2008 20:45:24 +0000

I have a student loan consolidation (not an original student loan) with Sallie Mae. I am officially petrified that this is going to hork my credit just as the wife and I are in the midst of preparing to buy a house! Not good!

By: Jess

Jess — Wed, 14 May 2008 20:36:37 +0000

I receive score alerts from myfico and noticed a 55 point drop. Glad to have an explaination for this now. I’m anxious for the problem to be fixed. Thanks for the update!

By: Jillian

Jillian — Wed, 14 May 2008 20:17:59 +0000

I use MyFico’s Scorewatch and saw my score drop 121 points based on this. I pulled my “ScorePower Report” through MyFico and saw that my score has already increased back to the level it was at before. Give it a few days for the automated systems to pick it up, but your score should already be fixed if a lender or anyone else does pull of your score.

By: paul

paul — Wed, 14 May 2008 20:06:11 +0000

interesting. i just printed off my wife’s credit report this weekend and i noticed that one of the loan accounts (that was already paid off) had been noted “delinquent”. i was a bit perplexed by this, but i admittedly grew complacent over the last few days and did nothing. foolish, i know. i’ll be interested to see how quickly this resolves itself.

By: samoofish

samoofish — Wed, 14 May 2008 19:53:09 +0000

I’m not surprised to hear this news about Sallie Mae. Years ago I had a student loan through Sallie Mae, one day I got a letter from them stating that my payment amount would be increased effective immediately. The letter went on to say that they had “miscalculated” the interest. I was struggling to get by at the time and had a hard time coming up with the unexpected increase. I was upset that I had to pay for THEIR mistake. The day I paid off my loan was wonderful.

By: SavetotheFuture

SavetotheFuture — Wed, 14 May 2008 19:19:51 +0000

I am glad I was lucky enough to work and pay cash through college. I just hope that Sallie Mae and other Loan Sharks pay for their mistakes. (Financially Speaking)

By: Heather

Heather — Wed, 14 May 2008 19:12:43 +0000

Lo.Price — In addition to Amex mentioned above, other credit cards will watch your credit score for free. I have a WaMu credit card that sends me a notice every time my score goes up or down by 20 points, for no extra charge. If you have a card, log in online and see if it’s an option with yours.

By: bob

bob — Wed, 14 May 2008 19:04:54 +0000

Has anyone else used creditkarma.com? I’d love to see my credit score for free, but this is the first I’ve heard of them.

We’ve got some student loans and we’re about to buy a house. It’d be nice to see what my score is before we go loan hunting.

By: Ken

Ken — Wed, 14 May 2008 18:44:29 +0000

I just spent a while looking at the mentioned thread on MyFICO (I have a graduated payment plan with SM), and it appears as if everything has been fixed at this point. SM has admitted that it is an error, and that graduated payment plans should not be coded as being derogatory. They’ve sent Equifax an updated file and Equifax should have everything corrected within a few days. I’ll have to keep an eye out on my credit card and other interest rates though to make sure they don’t go up as a result..

@Lo. Price:
Take a look at creditkarma.com. Supposedly, they can give you your FICO credit score for free, and as often as you’d like. Unfortunately I cannot try it out because I have Debix credit service and they put a fraud alert on my credit reports.. (I might cancel it just so I can get the free credit reports!)

By: Andrew

Andrew — Wed, 14 May 2008 18:38:08 +0000

@ JB: I wouldn’t assume on this one. You could end up paying a lot more in the long run. Fork over the money to check your scores, then cancel the service afterwards.

@ Students: If you have any choice at all at your college, go with Direct Loans as much as possible. You can specify the loan types you want on the FAFSA or with the Financial Aid office on campus.

Sallie Mae is the loan shark of the financial aid industry. When my mom went back to school she had (and still has) recurring problems with them borking the way they accredit payments and they use very aggressive tactics if you get behind. Not to mention the recent scandal with urging preferred treatment in schools.

I’ve only used Direct Loans and haven’t had a single problem. Every issue I’ve had has been handled promptly, even when consolidating. With the things I’ve seen my mom go through I refuse to use Sallie Mae, even though it’s limiting how I go to college.

By: Lo. Price

Lo. Price — Wed, 14 May 2008 18:11:18 +0000

Thanks for the info, GRS, and thanks for the credit monitoring info from Stephen as well. I was wondering how Bethany and Rebecca were monitoring their credit scores, on what seemed like a daily basis. As GRS points out, annual credit reports are free but getting your credit score costs money, so I wonder if it is worth paying the money if you are not about to apply for a major loan (like a mortgage).

By: Stephen

Stephen — Wed, 14 May 2008 17:28:26 +0000

As a recent college grad with student loans through Sallie Mae (2 of them being on the “graduated plan” that this post talks about), I received my free Equifax report last week and noticed some issues with the way they reported my loans. However, I did not have any black marks against my credit, unlike the issue addressed here.

I am monitoring my credit through a free, 1 month offer from Amex that has been working well. If you have an Amex card, check out the Amex creditsecure program. It is free for 30 days.

By: Elaine

Elaine — Wed, 14 May 2008 17:24:41 +0000

Ugh, Sallie Mae…they almost borked our mortgage application a few years back by having one student loan listed like 5 times in different states of payment/non-payment. (Which, by the way, I think is a good argument for getting a mortgage from an institution that you trust. The guy at our credit union got it all straightened out, no big deal. He said it happens pretty regularly.)

When my husband finished his degree a few years back, we reconsolidated everything with Direct Loan (dept of Ed) and it’s been totally smooth.

By: JB

JB — Wed, 14 May 2008 17:05:06 +0000

I’m closing on a house next week and I have a student loan! I wonder if I’m affected? I can’t check my credit report for free until June!

Well, I’m not closing until next Thursday and according to the post it will be cleared up by the end of this week, I should be OK.

Thanks for the info!

By: Heather

Heather — Wed, 14 May 2008 16:51:19 +0000

Thanks for posting this J.D. I just want to also point out that my mom, the co-signer on my loan (another bullying move by SallieMae), was affected by this, but I wasn’t, and I’m not even on the graduated payment plan. It’s craziness.