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Check your credit report immediately – if you’re one of 10 million Sallie Mae borrowers! On Tuesday, MSN Money reported that a blunder by the nations top student loan provider “briefly trashed the scores of thousands of oblivious borrowers.” Scores nosedived after Sallie Mae mistakenly reported their borrowers’ graduated loans as arrangements for partial payments. Graduated loans benefit borrowers by – allowing them to initially start with lower (sometimes interest only) payments for the first few years of the loan with a gradual increase to full payments over time. An arrangement for partial payment typically signals the credit bureaus to code your account as delinquent – precisely what Equifax proceeded to do when Sallie Mae reported these loans to them. The loans were coded as delinquent, with past due balances and a recent history of missed payments – even though they were current.Sallie Mae has since reported that it has rectified the problem; that only 10 per cent of all customers were affected by the error and these customers’ scores have been readjusted to previous levels. To be safe, I would advise Sallie Mae borrowers to take a proactive approach and personally double check their credit reports to ensure that that this error has been removed – It is a high priority error. High priority errors can do significant damage to your credit score and need to be removed immediately. After notification from his credit monitoring service, one affected borrower found that his credit score had dropped from 727 to 646 – the difference between qualifying for a loan with a low interest rate and a high one. With a 720 and above credit score most lenders will automatically approve you for the best available loans with the lowest interest rate. Vice versa, a poor credit score can ruin your chances for buying, refinancing or renting a home or getting a better deal on your auto insurance premiums, car loan and credit cards, and it may even affect an employer choice in hiring you.

In Step 5 of my book 7 Steps to a 720 Credit Score, Fourth Edition (pages 76 -94), I discuss high priority errors such as – mistakes in payment history, incorrect credit limits, duplicate collection notices and collection notices that are not yours. Removing these types of mistakes can positively impact your score by 20, 50 or even 100 points. My recommendations if you are a Sallie Mae borrower – is to do the following now:

1. Contact www.AnnualCreditReport.com for a free copy of your credit report (you are allowed one free report every year). Or purchase a copy at www.myFICO.com. Find your Sallie Mae account on the report. If it states that “Arrangements made with credit grantor to make partial payments,” contact Equifax now: www.Equifax.com.Dispute the error. Let them know that the account is being paid as agreed upon with Sallie Mae and – it is not delinquent.When dealing with the credit bureaus sometimes it’s sometimes helpful to have an already pre-formatted letter you can tailor to your specific needs – My “Mistakes in your payment History” template letter found in “Applying the 7Steps to a 720 Score Workbook” may help you find the words. Send this letter along with a copy of the portion of your credit report that has the Sallie Mae error listed and include any other supporting documents. Send this via certified mail, return receipt requested.

1. If this doesn’t work contact Sallie Mae directly at 1-888-2-SALLIE. They have promised to provide references and other related help to accommodate customers with concerns and questions.It is especially important if you’re having trouble with other lenders or companies that need a credit score to qualify you for programs or services offered – to call Sallie Mae right now for a reference!

Your credit is your financial reputation… Stay on top of it!
Philip Tirone’s, book “7 Steps to a 720 Credit Score: Strategies for Excellent Credit” as well as Applying the 7 Steps to a 720 Credit Score Workbook”, containing samples of the forms, letters and worksheets are both included in his 7 Steps to 720 Credit Score Kit. The kit is available at www.720score.com or by calling 1-888-254-2702.”