www.dailypress.com newspaper did not post this online "Sallie Mae debt could increase mortgage costs" By Kenneth R. Harney with The Nation's Housing Could your outstanding debt to Sallie Mae --- the largest provider of student loans in the country--- cause you to pay more on your home mortgage? Could that happen even if your Sallie Mae payment history has been perfect for years? The answer to both questions is a surprising yes. Though the company has not informed its 7 million-plus customers, Sallie Mae confirms that it has stopped reporting borrower loan repayments to two of the three giant national credit repositories. Non-reporting of on-time payment histories, in turn, can lower Sallie Mae borrowers' credit scores-- sometimes by enough to render them ineligible for the best-available home loan rate quotes. Take the case of the first-time homebuyer Eric Borgeson. A 31-year-old architect based in Eagle-Vail, Colo., Borgeson recently applied for a $237,000 mortgage to buy a new house. His loan officer, Chris Neuswanger of Macro Financial Group, ordered a preliminary credit check and found that Borgeson qualified for the lowest-available rate from national mortgage lenders. Included in Borgesonâ??s credit files at Equifax, Experian and Trans Union were years of on-time student loan payments to SLM Corp. of Reston, Va., better known as Sallie Mae. But when Neuswanger formally submitted Borgesonâ??s application to mortgage giant Fannie Mae --- necessitating another round of credit â??pullsâ? from the three national repositories --- Borgesonâ??s perfect student loan histories had mysteriously disappeared from two of his files. Only Equifax now had his Sallie Mae data. As a direct result, Borgesonâ??s credit scores at Trans Union and Experian plunged by 40 points and the â??risk-basedâ? mortgage rate he now qualified for jumped by nearly 11/2 percentage points. The higher-rate mortgage will cost Borgeson nearly $200 a month more in interest payments, he estimates. What happened? Why did Borgesonâ??s Experian and Trans Union credit files suddenly contain no information about his perfect credit history with Sallie Mae, while his Equifax credit file had it all intact? Neuswanger learned that Sallie Mae had decided to withhold borrowersâ?? account information from Trans Union and Experian, while providing it to Equifax and a smaller credit bureau called Innovis Data Solutions. Sallie Mae spokeswoman Martha Holler confirmed the policy change in an interview with me last week. The reason, she said: The firm is unhappy with â??the selling of (Sallie Mae) customer information to third partiesâ? by the two other repositories. In other words, marketers of competing financial products were able to access Sallie Mae customer credit dataâ??just as banks, mortgage lenders and insurance companies do routinely on one anotherâ??s accountsâ??and target financial offers to them by mail or phone. But such a policy of non-reporting could be having costly side effects. Borgesonâ??s mortgage experience could be duplicated by thousands of other Sallie Mae loan holders, according to credit experts. â??This is outrageous,â? said Brad Scriber, housing coordinator for the Consumer Federation of America. Scriber directed a national study of credit system problems last year, including the negative effects of non-reporting of customer data by credit card companies, banks and other lenders. Student loan customers â??often only have relatively brief credit information in their filesâ? said Scriber, and â??withholding what may be one of their best records documenting responsible credit behavior could be very harmfulâ? to their ability to buy a first home. Fair, Isaac & Co., developer of the FICO credit scoring software confirmed that younger consumersâ??whose credit histories may only have a few trade lines --- could be â??disproportionatelyâ? hurt by non-reporting of on-time payments. Spokesman Craig Watts said Fair Isaac advocates, â??full and accurate reporting of all (accounts) to all three national credit bureaus.â? The usual purpose of non-reporting, say critics of the practice, is to help a creditor keep their best-paying customersâ?? records out of the reach of competitors. A credit card bank, for example, can ask a credit repository for a rival bankâ??s customer names and addresses who have FICO scores above some specified level. If key pieces of positive payment data have been withheld on those borrowers, however, they could carry lower scores, thereby putting them out of the raiding marketersâ?? reach. Congress currently is considering legislation that would revamp the credit reporting system, including proposals to require or encourage full reporting. Federal banking regulators have urged lenders to report fully on every customer but have no legal sanctions to use against those who fail to comply. Sallie Mae spokeswoman Holler said the company â??would be happy to have individual discussions with individual credit bureausâ? over how to keep borrowersâ?? account information from competing marketers. Meanwhile, though Eric Borgeson is paying $200 a month extra for his home mortgage. And unknown numbers of other home buyers with student loans could find themselves in the same fix.