Consumers are complaining that a change in how Sallie Mae decided to recode some loans caused their credit score to drop by over a hundred points. That’s enough to make a $93,240 difference in a home loan’s total cost. Here’s what happened.

Sallie Mae offers a variety of loan repayment options. One of these is a graduated repayment, with low non-principal payments for the first few years, with the payments slowly getting bigger over time. Before, this loan was coded the same as all other Sallie Mae loans. Now Sallie Mae has added the comment “Arrangements made with credit grantor to make partial payments” to the graduated repayment loans. To the credit bureaus, this comment is a black mark; ConsumerismCommentary says that it means that, “Sallie Mae is reporting the your loan balance is fully due immediately and that your payments are behind more than 60 days.” Reader Jules, a victim of the credit score downgrade, writes, “Hopefully if enough of us complain this can get fixed soon, and hopefully before my credit card company notices and takes an opportunity to jack up my rate since I no longer have excellent credit.”

The error appears to be limited to Equifax for the moment. Posts later on in the forum say that Sallie Mae officials are aware of the issue and are sending an update to Equifax later this week with a request to change back to the old way of reporting.

For insight into how just a few points lower on your credit score can affect your life, read How Much Do Credit Scores Really Matter?

*new error in Sallie Mae reporting* WTH happened – why is FICO contradicting itself? Please help! [myFICO forums]

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.