There are few topics as polarizing as credit repair. Depending on who you talk to, credit repair is usually thought of as impossible, illegal, something you can only do yourself, or something you need professional help to perform. Rarely do you find someone with a perspective on credit repair that is not at the far end of one of these extremes.

The fascinating thing is that in most cases, whatever people believe to be true will be true for them.

The poster on the Yahoo! Answers forum who states that “there is NO SUCH thing as Credit Repair….it’s a scam….” will never realize any benefits from repairing their own credit. By believing that credit repair is impossible, they are fulfilling their own prophecy by ignoring their rights to dispute their own credit. By not believing it can be done, they are proving their own point. This person, and every other person who ignores the possibility of credit repair, will fall into the category of people whose credit scores will only improve through the passage of time.

The same is true of people who believe that credit repair companies do not work. Another poster on Yahoo! Answers stated that

“There is no such thing as repairing your credit through someone else. If they can, they are doing this via an illegal way and be extremely careful, as it can end YOU up in jail and fined.

The ONLY way to repair credit is to do it yourself.

Pay your bills on time ;o)”

Along with being misinformed about how the credit repair process works, this person is letting their flawed knowledge keep them from so much as investigating the possibility that a credit repair company may be able to help them out. Once again, in believing that it is impossible for a credit repair company to provide any value, this person has assured that they will never receive any value from a credit repair organization.

It is truly astounding how many people out there believe that credit repair cannot work and credit repair companies are nothing but scams. It is also unfortunate that it is these voices that seem to be the loudest because not only are they making credit repair an impossibility for themselves, but they are convincing so many other people to not even attempt to repair their own credit.

What is equally astounding is how these people can be so passionate about outing credit repair as a pipe dream and a scam when there are so many other people out there who are living proof that credit repair does in fact work. These are the people who have allowed for the possibility that their credit could be repaired and realized the truth about their credit reports.

It is hard to believe that anyone could completely dismiss the idea of credit repair when there are stories like this:

“I signed up for [credit repair firm] a couple of years ago. They basically write a couple of letters a month on your behalf to either businesses or credit reporting companies asking for verification of debt, that kind of thing, or if you instruct them, actually challenging the debt. After a few rounds of this, negative credit items start to fall off your report. You can totally do this yourself, but it’s been worth the cost to me (something like $40/month) since I am too lazy to regularly write this kind of letter. I also like how when the credit bureaus do bother to write back, they’re always pretty whiny and pissy about it.

Some people seem to think this is some kind of scam (like, paralegals write the letters on your behalf instead of attorneys, and some people don’t seem to understand that when you give an attorney “power of attorney,” they can write letters as you), but I think it’s a fair price for something I was too lazy to do myself. Ultimately, they pretty much got rid of all the negative items on my report except for the ones that were at least semi-legitimate. (I’m not going to pay a parking ticket I got five years ago in a state I’m not going back to.) The ones they did get rid of were things like AOL continuing to charge a credit card after a) I had cancelled the AOL account, and b) I had cancelled the credit card! It just wasn’t worth my time to chase this down with AOL or the credit card company.

It’s annoying that I’m responsible for fixing something that this bogus industry screws up in the first place, but other than that, I’m a happy “credit repair” customer.”

People who believe that credit repair is impossible will never see any benefit from it. People who believe that credit repair can only be done by themselves will only see the benefits of their personal efforts. People who believe that credit repair companies do not work will never invite the opportunity to have a credit repair company work for them.

Ultimately, when it comes to credit repair, we all create our own truths. All anybody can ask of you is to perform your own research instead of letting others choose your truths for you.



Thanks to Stuart Hunter for contributing this article to our Credit Repair blog:

Credit Card For Rebuilding Credit

 

In years past, the credit repair industry was tainted by fly by night credit repair clinics and other credit fixing scams. Despite the need that many people had to get help with repairing their credit, it was hard to find a credit repair company they could trust.

Today, the credit repair industry has matured thanks to increased awareness and federal regulation. The keystone of this regulation is the Credit Repair Organizations Act, also known as CROA. Recognizing the value of professional credit repair services, Congress enacted CROA in order to define appropriate actions of a credit repair organization and to outlaw many of the practices typical of a fraudulent credit repair clinic.

While there are still some fraudulent credit repair organizations trying to take your money, by understanding the basic ideas of CROA, you can easily identify these scams and make sure you avoid them. Knowing what things credit repair companies are and are not able to do, will keep you from becoming a victim.

Below are three key points of CROA and what they mean to you as you are shopping for a credit repair company.

1) Credit repair organizations cannot charge fees for services before they are rendered

Most credit repair scams start off the same way. You are required to pay a large upfront fee, often times in the range of hundreds or even thousands of dollars. Then, after you have made the payment, the credit repair company does little or nothing to repair your credit and in some cases, simply disappears with your money.

To keep you from becoming a victim of this type of scam, CROA prevents credit repair companies from charging for services before they have been provided. If a credit repair company charges a set up fee, they cannot collect that fee until after the task of setting up your case has been completed. If a credit repair company charges monthly fees, those fees cannot be collected until after a month’s worth of services have been provided.

Keeping this requirement in mind is probably the most important thing you can do to avoid becoming a victim of a credit repair scam. Even today there are companies like Champion Credit Consulting and Credit Clean who will try to charge you $795 and $1223 before they have done anything to repair your credit.

2) Credit repair organizations cannot make incorrect or misleading statements

Preying on the naivety and lack of knowledge of people looking to improve their credit, many credit repair companies entice people with claims of improving their credit score 100 points in 60 days or removing bankruptcies from their credit reports. The truth is that while it is possible for each of these things to happen, no credit repair company can promise that they will.

In fact, no credit repair company can promise to remove anything from your credit reports because ultimately, it is up to the credit bureaus what items are listed on your reports. Disputing credit is not failsafe. There are cases where no matter what you do, a particular negative item will not be removed from your credit reports.

Any company that promises to increase your credit score or remove any negative items from your credit reports is violating the law. According to CROA, and the nature of the credit system, the best any credit repair company can do is promise to put forth a best effort. Just like in a court of law, a lawyer can promise to work as hard as they can, but they cannot promise that you will win over the jury.

3) Credit repair companies must inform you of your rights

The credit system is not easy and many people do not adequately understand their rights within the system. This lack of education makes it easy for con-artists to prey on the unaware.

So you do not get caught off-guard, credit repair organizations are required to inform all prospective customers of their right to order their own credit reports and their right to dispute the questionable information they contain. They are also required to inform you of your right to cancel your credit repair service within 3 days of signing up for no reason and with no penalty.

When signing up with a credit repair organization, CROA dictates that you should be presented with a disclosure statement titled “Consumer Credit File Rights Under State and Federal Law”. This statement describes the rights mentioned above.

CROA has changed the landscape in the credit repair industry and has been very effective in helping the FTC identify and prosecute shady credit repair organizations. Because of CROA, you can feel confident that your money will be well spent when you enlist the services of a legally compliant credit repair company.



Thanks to Stuart Hunter for contributing this article to our Credit Repair blog:

Credit Report Monitoring