Getting involved in credit repairBrian C. Abercredit bureaus, Credit Repair Organizations Act, Fair Credit Reporting Act
The credit industry, as a whole, is one of the most important
industries in existence. With loans, insurance and even employment
taking individuals' credit pictures into consideration, the credit
industry is getting bigger every day. The credit bureaus make money
each time credit information is pulled. People with low scores or
damaged credit have their credit pulled dramatically more often
than those with good credit. Credit bureaus are fundamentally
opposed to credit repair companies for one simple reason, it costs
them money!
Think about it for a minute: If a consumer dispute by a consumer
or a credit repair company is going to add overhead to the credit
bureaus operations and if the dispute process is successful, then
the consumer will not be applying for credit as often. With this
reducing the credit reports sold by the credit bureaus, is it any
wonder that the credit bureaus would create bad press about credit
repair companies?
A lot of the negative stigma in the credit industry about credit
repair companies is hyped up by none other than the credit bureaus
themselves. You would think that instead of putting all of this
time and effort into defaming an entire industry that they would
just learn how to do their job better. As more than 79 percent of
consumers have errors on their credit reports, it shows that the
credit bureaus only do their job right less than 21 percent of the
time.
While some Mortgage Brokers handle the credit repair themselves,
others wish to save themselves the time and inundating processing
by referring them to a professional credit repair company. These
businesses or credit services organizations are helping consumers
get back on track by assisting in the removal of unverifiable and
inaccurate negative items from their credit reports. Brokers tend
to prefer credit repair companies that allow 24 hours a day, seven
days a week tracking for both them and the client to maintain a
grasp on when they are ready for prime financing.
Consider this: As a loan originator, you are paid to originate
loans. The more loan volume you write, the more money you make. A
simple business concept called "leverage" dictates that the way to
make the most money is to spend your time doing the things that
generate the most income for your business. For you, that means
meeting with clients and taking applications—not processing
loans, handling the underwriting, or repairing your client's credit
score. Not to mention that many brokers who attempt to do credit
repair on their own do not realize that all the advice they give or
administer must be 100 percent correct or they are violating the
Credit Repair Organizations Act. A complete understanding of the
ever-changing laws, understanding how the credit bureaus operate
and an arsenal of aggressive tactics are crucial in providing
effective credit repair. Focus on the things that pay you the most
money for the time you spend doing them and delegate the other
tasks to people who are proficient at those activities.
If you are going to attempt the credit repair for yourself or
your clients, then do your homework! I recommend going to
BrokenCredit.com and figuring out the best way to dispute your
negative item. Make a plan and stick to it, as credit repair is not
something to undertake halfheartedly. It all comes down to whether
or not the derogatory items are meeting the requirements within the
Fair Credit Reporting Act to be continuously reported; if they
aren't or they're not verified within a reasonable amount of time,
then by law, they must be deleted.
As is apparent in today's market, every industry has people who
do not operate in the most professional manner. Operation Clean
Sweep has done a great job with removing the unscrupulous companies
and also making sure that all companies currently operating are
meeting the federal and state requirements.
Another organization, the National Association of Credit Services
Organizations (NACSO), is spearheading the issue and aiding in
the prevention of fraudulent activity within the credit services
industry through self-regulation. If the company you are
considering working with has the NACSO "Standards of Excellence"
seal displayed on their Web site, then they have passed a rigorous
application and enrollment process. NACSO does not compare
businesses against one another, but rather evaluates businesses
against their Standards of Excellence—and their standards
clearly speak to the quality and capability of a credit repair
company.
So don't believe the hype the credit bureaus would like you to
believe. Credit repair is a necessary tool for the capable and
attentive loan originator. As long as you make sure the company you
are utilizing is compliant with the laws, posts recent effective
results and is, preferably, a member of NACSO, then you and your
clients should be well taken care of. You don't send your clients
to a credit repair company because there is nothing else do with
them, but more so because you care enough to do so.
Brian C. Aber is a senior account executive with HTDI Financial and sits on
the board of advisors for the National Association of Credit Services
Organizations (NACSO). He can be reached at (877) 877-4834,
ext. 704, e-mail
[email protected]
or through his Web site, www.increaseyourloans.com.
