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Credit repair: Do it yourself or hire a credit restoration company?

Brian C. Aber
Aug 27, 2009

When looking to challenge derogatory items with requirements outlined in the Fair Credit Reporting Act (FCRA), a consumer typically has two options: Do it themselves or hire a professional credit repair agency. Which is better? It depends on the situation. There are many factors that one has to take into consideration when planning the credit repair process. It’s bad enough with the level of criteria involved within the FCRA to handle a proper dispute without having to deal with the mistruths and anti-credit repair propaganda produced by the credit bureaus and their affiliates. The credit bureaus will promote the online disputes system as a reputable way to clean up your credit report; however, what they fail to mention is by using this method, they are not required to comply with specific areas of the law that protect consumers, like forwarding your dispute to the creditor or supply you with the process of verification. These methods typically cause “soft deletes” and the item reappears after a couple of months. This is typical of their defense strategy of “Attrition and Delay.” With entities that make more money when consumers have derogatory items and good credit data being considered “unsellable,” how can you assure you are being dealt a fair hand? Take the statement “you can do it yourself” and apply it to businesses that aren’t involved in credit repair. How many other valuable services can be done by the client themselves? While one can do their own taxes, they can mow their own lawn or represent themselves in court, but we hire professional accountants, landscapers and attorneys for matter of lack of expertise and convenience. Consumers can do it themselves or you can try to help your clients yourself. If you are prepared and committed to the entire process, then it is recommended to visit, research the FCRA and the other laws designed to protest consumer rights and stick to a game plan. Make sure correspondence to the bureaus are effective and provide a clear and legible proof of address and social with your disputes. Please make note that loan originators should still be careful with what advice they hand out and its level of accuracy. While you may not be a credit repair company, you can still be held liable under the Credit Repair Organizations Act if you are financially tied to your client. If you consider utilizing the services of a professional credit restoration company, then you still have your homework to do … just not as much. The number one qualification you want to use when researching credit repair companies is results. They can have all the bells and whistles, preach about how many attorneys they have working for you or that they have “Attorney Facilitated” services, or even be a little less expensive than the next guy, but none of this matters unless they are producing effective results and attaining deletions of all your unverifiable and inaccurate negative items. You might have seen some agencies claim they have removed 11,237 late payments. That sounds impressive until you find out they’ve only serviced 12,000 clients. A more important statistic is the agency’s fix/deletion ratio, which is the total number of deleted items divided by the total number of derogatory accounts. Also, find out what that fix/deletion ratio is for the first round of correspondence. Is the agency posting recent results on their Web site or do they just happen to be a couple examples of their above average clients from years past? Providing results from each month they are in service shows that they continually have the ability to achieve the results they set out to attain. Does the company charge per deleted item? This can get very expensive for consumers of agencies that are very successful at what they do. Does the company charge their fees upfront? Charging upfront for credit repair is illegal, unless they are exempt from the Credit Repair Organizations Act. Don’t let the membership fee fool you. It’s still an upfront charge no matter what way you look at it. While I will only vouch for the company I work for, there are plenty of ethical and experienced companies out there. For example, members of the National Association of Credit Services Organizations (NACSO), go through a very strict and rigorous application process. Ethical and experienced companies have been here to help your clients and will continue to be here for many years to come. 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 by phone at (877) 877-4834, ext. 704.
Aug 27, 2009
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