Credit Repair Blog

Looking Into Credit Repair Guarantees and Warranties

Credit repair is never a sure thing. Even if you exercise every legal right available to you ranging from submitting credit bureau disputes to suing your creditors, there is no guarantee that you disputes will produce results or that you will prevail in court. Sometimes it doesn't matter what you do, a negative item will remain on your credit report for 7 to 10 years.

It is because of this fact, and the apparent biases against credit repair companies, that the FTC frowns on overly aggressive messaging from credit repair companies and is so quick to point out that you can remove "accurate" negative information from your credit reports (accurate is in quotes because case law has essentially defined accurate as meaning negative item you cannot get the credit bureaus to delete). Companies that too strongly imply that their credit repair services will definitely be able to delete negative information from your credit reports risk FTC sanctions for misleading advertising.

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BBB Ratings for Credit Repair Companies

This post is reprinted with permission. We are republishing it here because we feel it is an excellent post for Credit Repair BEST and a good explanation of why we do not use BBB ratings in our requirements for becoming a Credit Repair BEST Approved credit repair company. The original post can be found here.

The Better Business Bureau can be a good resource for checking out companies, getting a feel for how reputable they are, and seeing how they handle customer complaints. So, naturally, many people check with the BBB when researching credit repair companies, especially since there is so much talk about credit repair scams. But, it is when researching credit repair companies that the BBB can really let consumers down.

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A Sign of a Credit Repair Scam that Could Give You a False Positive

The FTC provides 6 tips for recognizing a credit repair scam with one of those tips being that a credit repair company who "recommends that you do not contact any of the three major national credit reporting companies directly" is "up to no good".

Since the FTC website is one of, if not the most cited resources on credit repair out there, this guideline as well as the other 5 have been widely circulated on a number of other sites warning people of credit repair scams. As a consequence, it is not only the FTC site but all the other sites referencing it that are disseminating information that, because of the way it is written, can cause people to believe a perfectly legitimate credit repair company is a scam.

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Don't Be Afraid of the Big Bad Collections Agency

Nobody likes having to deal with a collections agency. Their single minded desire to get money from you can lead to persistent phone calls and threats which only compounds the embarrassment or frustration of having a debt sent to collections on the first place. And on top of that, one of the tools a collections company has at their disposal is the ability to destroy your credit score, something they are more than willing to do in order to get your attention.

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Would You Pay $100,000 for a Good Credit Score?

When you read about credit repair companies in the news, it seems like it's always for the wrong reasons. It usually involves some shady credit repair scam where people have lost hundreds or thousands of dollars because they trusted someone who said they could clean up their credit reports or could get them a new credit file.

When hearing stories like this, a couple of thoughts tend to come to mind. The first is, "why would you believe that someone can repair bad credit?" and the second is "why would you pay so much for credit repair?".

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If There Are No Legitimate Credit Repair Companies, Then Someone Isn't Doing Their Job

A while back, Steve Baker, the director of the FTC's Midwest region who spearheaded a crackdown of fraudulent credit repair companies in 2006 called "Project Credit Despair" made the following statement:

"I remember the head of our consumer protection bureau saying a few years ago [that] she had never seen a legitimate credit repair company, and I don't think we have yet."

An interesting statement that certainly begs the question: if, according to the FTC's bureau tasked with protecting consumers, there are no legitimate credit repair companies, why are there so many companies out there today offering credit repair services. If every credit repair company out there is a scam, why isn't something being done about it? And as an extension of that, if after being around for two decades the credit repair industry has yet to produce a single legitimate company, why are there federal and state laws defining how a credit repair organization can act instead of laws stating that providing credit repair services is illegal?

» Continue reading If There Are No Legitimate Credit Repair Companies, Then Someone Isn't Doing Their Job

Lower Your Car Insurance Rates by Repairing Your Credit

If you are like many people these days trying to make your paycheck go a little farther, you may have considered shopping the different car insurance companies to see if you can find a better rate. Judging by the number of Progressive and Geico ads on television these days, it's a safe bet that you aren't the only one.
Something to keep in mind while you are searching for that ideal car insurance premium is that, odds are, regardless of which car insurance company you end up with you will be offered a lower insurance premium if your credit is good. In fact, according to according to research firm Conning & Co, more than 90% of car insurance companies consider the information in your credit reports when putting together an insurance policy.

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What Does the Veracity Credit Consultants Lawsuit Mean for the Credit Repair Industry?

It's a case that anyone operating in the credit repair industry will likely want to keep a close eye on. On February 22, Colorado Attorney General John Suthers announced that attorneys from his office's Consumer Protection Section had filed a lawsuit against Denver based Veracity Credit Consultants, a credit repair company providing services since 2003. The lawsuit alleges that Veracity violates federal and state laws prohibiting credit repair companies from charging for services before those services have been performed, making misleading statements in marketing materials, and not providing proper disclosure to consumers.This will be a particularly interesting case because unlike other credit repair companies that have recently been shut down by the FTC, on the surface, Veracity appears to be one of the more legally compliant companies out there. Their general billing practices look to be in line with what is typical among many of the largest credit repair companies and there are certainly far more blatant examples of misleading messaging among other companies in the industry. While there may be specific illegal activities that set Veracity apart from other credit repair companies that have raised the ire of the Attorney General, they aren't highlighted in the court documents (PDF).

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Accurate Items are Deleted from Credit Reports Everyday

The FTC tells us that "No one can legally remove accurate and timely negative information from a credit report", credit repair companies are required by law to say the same thing, and just about every other credit repair resource you can find agrees. This statement is not only deceptive, but it is dead wrong.

The truth is that accurate items are legally removed from credit reports everyday. In an ideal world, there would be no way to remove accurate items from your credit reports but in practice this is not the case. The Fair Credit Reporting Act says the credit bureaus must remove any item on your credit reports you dispute if after performing an investigation, they are unable to prove the item should be there. A more accurate version of the statement made by the FTC is that "no one can legally remove accurate, timely, and verified negative information from a credit report".

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The One Hundred Word Credit Statement

If you dispute an item on your credit reports and after conducting an investigation the credit bureau you are disputing with does not delete the item, you have the right to submit a one hundred word statement to be added to their credit reports. This statement is supposed to be a way for you to plead your case to creditors looking at your credit reports.

According to the Fair Credit Reporting Act:

"If the reinvestigation does not resolve the dispute, the consumer may file a brief statement setting forth the nature of the dispute. The consumer reporting agency may limit such statements to not more than one hundred words if it provides the consumer with assistance in writing a clear summary of the dispute."

Many consumer advocates claim that this one hundred word credit statement can make a difference between being denied credit and getting a loan. While this may have been the case 30 years ago, it certainly is not the case today. Personal statements such as these are almost never read by creditors. Creditors have better things to do with their time than pore through your entire credit report in order to determine what sort of a credit risk you are. Instead, they simply look at your credit score and assume the Fair Isaac folks have accurately converted your credit risk into a single numerical value.

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Removing a Bankruptcy from Your Credit Reports

Yes, it can be done.

People will say there is no way you can remove a bankruptcy from your credit reports but there is nowhere in the Fair Credit Reporting Act (FCRA) that says certain items on credit reports cannot be removed. All it says is any information on your credit reports that cannot be verified as accurate must be removed.

If you think about it, this makes sense. Creditors and the credit bureaus make mistakes all the time. For example, a former employer of mine who was also the CEO, President and co-founder of a multi-million dollar company was denied a mortgage loan because his credit reports showed he had filed for bankruptcy. He definitely had not filed for bankruptcy but he did have a very common first and last name (5,537 people in the U.S. share his first and last name according to ww2.howmanyofme.com). In all likelihood, someone had mistakenly added someone else's bankruptcy information to his credit reports.

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Paying for Credit Repair Services

Despite what you have heard, credit repair companies do no exist solely for the purpose of ripping you off. Reputable credit repair companies exist for the same reason any other company in the service sector exists, they perform a service.

But you can do credit repair yourself screams a chorus of consumer advocates. Well of course you can do it yourself. Short of performing major surgery, name one thing you pay for that you cannot do for yourself. Granted, the law gives you the right to repair your own credit but the law also says you can grow your own food and replace your own transmission.

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Plead Not Guilty to Bad Credit

How well would this go over? Imagine you have been falsely accused of stealing a car and the minimum sentence you will end up serving if you are convicted is seven years. Naturally, you hire a lawyer to represent you in court. You sit down with your lawyer to discuss your options and the advice he gives you is this: "There is nothing I can do so just plead guilty, go to jail and if you make sure not to steal any more cars in the next seven years, you'll be free again!"

I'm thinking that you just might start looking for another lawyer at that point.

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