There are a lot of “credit repair” companies out there, and they promise a lot. How good are their promises, and what can they really do for you. We will take a look at the realities of the credit repair business in this article.
Credit Repair involves a company contacting the three major credit bureaus for you, on your behalf, and disputing derogatory items on your credit report.
Understand this, first of all: the purpose of the three major credit bureaus, Equifax, Transunion and Experian, is to accurately report a client’s credit and payment history to potential lenders.
They generally do a very good job of fulfilling this mission. If items are true, you really have no right to expect those items to be removed before seven years have passed, or, in the case of bankruptcy, ten years have gone by.
That being said, the credit repair companies basically exploit a part of the law, under the federal Fair Credit Reporting Act, which states that a consumer has the right to dispute any item they feel or believe to be inaccurate on their credit report. A disputed item can be presented to the merchant who granted the credit, and that merchant has 30 days to validate that that debt is correct. If the merchant fails, for any reason, to verify that debt as accurate within a 30 day period from the time the dispute is filed, then, by law, that derogatory item must be removed from your credit report!
In the real world, especially during the Christmas holiday season, merchants often do not have a chance to respond within the required 30 days and verify legitimate debts, so the credit repair company will then be able to have that derogatory item removed. Other merchants may have gone out of business, etc., so it is not necessary to wait a full 7 years to have that item drop off your credit report.
You as a credit consumer can dispute any item on your own credit report. Are you able to do that? Are you a good letter writer? Do you know how to navigate the complexities of obtaining and updating your reports? Some people can, some people cannot. The credit repair companies will do all this work for you. And they are good at it, they do it every day, all day long.
There are a lot of credit repair companies, however, that promise too much, and charge too much up front. Some companies want you to pay hundreds of dollars up front before they go to work for you.
A good credit repair company will charge you by the month. The first month may involve a small set-up fee in addition to the monthly fee. You are not committed to a contract, you use their services for as many months as they need to get your credit scores improved sufficiently. For example, $75 to set up and $49 a month, no contract.
Under the law, a credit repair company cannot usually obtain your credit reports for you, they will advise you as to how to obtain them, whether for a fee or free. You need to provide them with your credit reports that they can work from to begin the repair process.
Everyone has a right, under federal law, to a free annual credit report. Google this and you will find the site for this.
I am a mortgage broker and I deal every day with clients whose credit is not up to snuff, and I do have a credit repair company I refer clients to, and, 3 or 6 months down the road, they are in better shape and I can then help them get the loan they seek.
As always, seek the advice of a certified financial planner or mortgage planner when you begin the credit repair process, so you can steer clear of the scammers and get aligned with a good credit repair company.
By: James Hussher
Posts Tagged ‘Repair Business’
Does "Credit Repair" Really Work?
January 27th, 2010The Credit Repair Business in Reality
January 1st, 2010
I can remember when I first started writing articles for EzineArticles. I also remember vividly the many “hisses and snarls” I received from so called friends about giving out so called secrets about credit repair.
I started my own website and when I published free information about the real deal on credit and explained some basic laws that are in place to assist the consumer in their desire to improve their credit, WOW, I was really chastised for giving out secrets.
I know one guy that runs a very successful credit repair shop, here in Florida and when I found out that his average charge per couple was in excess of $1,500 I almost “flipped”. He told me that most people are so intimidated about the collection scenario that this basic fear of the telephone ringing is what triggers his “closing technique” in getting these folks to sign up with him. Now, to me that is a real “shark” just swimming off shore waiting to “financially bite” another victim.
When he explained that his operation and many of his business associates get a “limited power of attorney” to deal with the credit bureaus and that in his operation, the customer NEVER sees the letters that he writes BECAUSE THAT IS HIS PROPRIETARY KNOWLEDGE. Well, this old man not only began to get squeamish in the stomach but downright disgusted because these same industry SECRETS were exactly what I was telling people about for FREE on my website. No wonder they got mad at this old man.
If, I have seen one credit repair business, I have looked at hundreds. They run from buying a credit repair (virtual business in a box) from some famous attorney for over $10,000 and he acts as your guru to novices trying to start their own business based on some limited knowledge that they learned from some of the web-sites that are on the internet. Some of this information is good and some is plain wrong. The problem is that when someone believes everything that is on the internet, they get laughed out of court or they simply lose.
There is the desire by “opportunists” in today’s troubled economic times to make a few bucks off of some peoples problems. But, no one truly understands the amount of work that is involved in restoring credit. First off, the credit reporting agencies are NOT the true culprit. They only report what is reported by the creditor.
Secondly, the creditor is the ONLY one that provides money to the credit reporting agencies so here we have the immediate problem. The credit reporting agencies DO NOT care about you. They only respond to the wishes of the creditors UNLESS you invoke certain laws or are assisted by an attorney because they know that you are serious and they do not want to go to court to defend themselves against a skilled attorney. Now the costs are expensive because an attorney is involved. Hence, the average family that cannot afford an attorney is left to swim in this mess without any help.
Now, here you come along and you write the dispute letters for the client. Big deal! Only to have the letters come back saying “the information being reported is accurate”. Now the average family simply accepts this and goes away very sad.
Aha, but you are the expert and now you have to write a second letter to the creditor challenging the information. Big deal, this is called the validation letter. Now how many hours do you have in this deal by now? Okay, the creditor does not respond to your request for validation and you either “throw up your arms in disgust” or you tell your client, “we have to sue somebody”. So now you begin to see the amount of time and paperwork that is being accumulated just on one entry alone.
Still want to become a credit expert? Okay, let’s move along. What do you do when the client is being sued by some “sleazy collection attorney” for some credit card company and someone has to appear in court or if not, a default judgment is entered. Where are you in this deal? Are you prepared to spend the time to go to court to defend your client? Do they have enough “law smarts” to appear themselves in court? Come on, get real, here is where you run and hide because now the business in which you charged these folks $1,000 is now beginning to take a lot more time than you thought.
I could write a book on “the credit repair business”. After all of these years, our office has finally found a legitimate company that truly helps people at a very, very fair price and the results of nothing short of fantastic. No, we are not connected with any of those credit repair companies that promise the moon and deliver nothing. You can learn more by contacting me on my website. In the meantime, do yourself a favor and don’t get swallowed up by emotion and making the wrong decision. I am available personally if you want to contact me.
By: Regis Sauger
Credit Repair Leads Are Essential To Success
November 30th, 2009
If you’re looking to start your own credit repair business then credit repair leads will be vital to your success. You can find many different web sites online provide business leads in general. This article will look at a few ways that you can benefit from credit repair leads.
Test the Quality of the Leads before You Buy Too Many
Before purchasing any credit repair leads you want to make sure of their quality. Most lead generation companies will allow you to test if you sample leads to determine the quality. You may have to pay for ten or so sample leads to test the out and that is perfectly legitimate.
Twenty Percent Conversion Is Good
Once you are satisfied that the leads are satisfactory for what you’re doing then you should purchase them in blocks of 100 leads at a time. If they’re good quality lead you should be able to convert one out of every five into a sale or 20%.
How Are the Leads Being Collected?
Credit repair leads are often collected online through many different means of advertising. You may want to check and see which types of ads they’re using and how much information is being collected.
Get All the Details
You want leads that are as detailed as possible; with Street address, full name, phone number and e-mail address. The more detail you get from each potential client the more likely you are to convert that lead into a sale.
If you are un-successful at converting the credit repair lead into in initial sale – You can always use the address and e-mail address for future contact. It’s not uncommon to take up to seven attempts with a sales call, follow up letters, or e-mails to convert the lead into a sale.
By: Tom Turner
