Video: Glitch affects credit ratings of 1 million students

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TACOMA, Wash. - Michelle Richards and her husband have been saving up so they and their toddler can move out of their 500-square-foot rental, and into a home of their own.

She's worked diligently to improve her credit score so they can qualify for a loan.

"Never pay late. Never," she said.

Part of that effort has meant paying her monthly Sallie Mae student loan bills in full, on time for the past two years.

That's why she was shocked when an e-mail from her credit monitoring service popped up Tuesday night.

"Michelle, there are a few changes to your credit report today," it said.

The alert says that overnight, her FICO credit score dropped by 52 points.

"Devastation hit me at that point, in fact, I was shaking. Oh, my gosh, did I overlook something?'" she said.

Richards had not overlooked a thing. The problem originated with Sallie Mae last week, during a download of account information to a credit bureau. That mistake negatively impacted the credit scores of 1 million Sallie Mae customers.

"This was a coding error and it resulted in an interpretation of the information that was certainly not what we intended. And we apologize, we sincerely apologize to our customers and we're very pleased that their credit reports have been corrected," said Sallie Mae spokesperson, Martha Holler.

Although Sallie Mae claims the problem is fixed, Richards says she hasn't seen proof that her credit report has been corrected.

The timing is particularly bad, since she just got approved for a home loan, and was planning to put an offer on a home on Friday.

"I am dead scared that when I go in on Friday, and I sign those papers, they're going to pull my credit and they're going to say, I'm sorry ma'am, we can't help you," she said.

Sallie Mae says they will give impacted customers a credit reference should they need one. They also suggest concerned clients log on to their Web site.