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Monday, December 29, 2014

10 Things Credit Repair Companies Don't Want You To Know Or Understand

At some point you may want to use a credit repair company to remove negative listings from your credit report. Before you do, here are 10 things you should know regarding that company and how they usually work.

(Full disclosure: I worked for a credit repair company that was attached to a law firm for 3 years. I was on the sales and even fulfillment side. If you are wondering whether credit repair companies really work, the short answer is yes they do. I saw plenty of negative listings removed off reports. I even had a couple removed for myself when with the company.) 
  1. You can dispute that negative listing yourself: Yep it's true, everything they do can be done by yourself. It just will take time and resources. Credit repair companies have no secret tricks to getting those items removed, they typically do what a consumer themselves would usually do. Credit repair companies have to let you know this by law and they usually tell you in the agreement. Of course if you agree online you might not read it, and they quickly read over it when agreeing by phone.
  2. Not all negative listings are equal/can be removed: Some of the negative listings on your credit report are just duplicates of an account. Those along with older listings are usually easier to remove off the report. The more recent a negative account on your report is, the harder it is to remove. That means you will stay longer with them, paying more money.
  3. Even though we didn't send any disputes, that isn't a guarantee you get a refund: Most credit repair companies have a refund clause in their contract. It states that if there is no work done on your behalf, then you are entitled to a refund. Their definition of work may be different than what yours is. Have they been emailing you, letting you know the updates of your file? To them that is work on your behalf, because they have been in contact letting you know what is going on.
  4. That average 10 items removed in three months may not apply to you: The use of any average is salesman talk to get you to sign up. That average is really of all customers and their items deleted. I once saw a report that had 400 duplicates removed in the first three months. That really boosts the average for the company right?
  5. Our letters to the credit bureaus are full of misspellings and sound uneducated: These credit repair companies write letters that try to sound like the average costumer. That means the letters sent will have misspelled words and some of the most uneducated wording you will see. It may talk about how dare the credit bureaus sit on a throne of lies about your credit score. I am not making this up.......
  6. We will sign those letters in your name: When you agree to the terms of the service you also agree to the "power of attorney to sign in your name." This means that the repair companies will have one of their employees sign your name to the previously mentioned misspelled letter. Oh and did I mention...
  7. We mail the letter with your home return address: That's right, and sometimes the wrong mailing address is on the credit report. That means those letters we send on your behalf may be sent back to you. Enjoy......
  8. Removing an item from your report might drop your score: You see that a negative listing was removed and you go to check your credit score. Instead of your score going up, your score has dropped. Why you might ask? That might have been the only credit you had in your name. When you have no credit your score is worse than if you had a negative listing. I know it doesn't make any sense but that is the case when dealing with credit scores.
  9. If we are a law firm our paralegals really didn't go to school for that: When I worked for the credit repair company we were a law firm. Because of state law we could officially call ourselves paralegals. Only problem is that none of us had really gone to school to be one. In fact half our staff was either in school or hadn't even gone to college. In fact I bet over half of the people I worked with wouldn't be able to even read a credit report. Most didn't care to study what we were selling, they were there to get you to sign up. They would say whatever was needed to get the sell. Boy really makes you feel safe about who is looking at your report right?
  10. Our executives, whether they be lawyers or credit repair experts never actually look at your report nor send out the letters: You go to the credit repair company website and they have pictures of their attorneys or credit repair experts. Honestly, those are just used to draw you in and get you signed up. They aren't made up people, they are just figure heads who have probably attached their name to get a nice paycheck from helping get you to sign up. Sorry to break that to you, but you don't have an attorney who is working for you to sue those credit bureaus or lenders when the time  comes.
So there you go, the top ten things that a credit repair company won't tell you when it comes to their services. What do you think of the list?

Thursday, March 6, 2014

Voluntary Repossessions Hurt Your Credit Score

This will be a short post, but if you're wondering whether returning your car to the dealer will result in a repossession listing on your credit report, the unequivocal answer is YES!!! In the eyes of the credit bureau's there is no difference between you voluntarily returning the vehicle and having a company come and get it. The wording will be different, saying voluntary surrender instead of repossession but they both will hurt your score. 

This is important when purchasing a vehicle to make sure you can afford the vehicle should something happen to your income. Plan appropriately and you won't have to deal with that hassle. If any car salesman tries to suggest returning the vehicle should you not be able to make the payments, just remember you don't need this negative listing hurting your credit score for seven years.

P.S. here is a link from Experian saying exactly what is in this post.

Wednesday, February 19, 2014

Experian's Newest Ad Minimizes The Difficulty Fighting Identity Theft

By now I am sure most of you have probably seen this newest ad from Experian on TV.

It states that the character isn't worried about the identity theft which occurs on her vacation because she monitors her credit report. While there is actually good advice to monitor your credit report, saying she isn't worried is a simplistic statement.  You as a consumer should be worried about identity theft because you would have to do some or all of the following:
  • File a police report on your stolen identity
    • I recommend this as mandatory. It helps to have for any future problems with some creditors.
  • Place a fraud alert or freeze to avoid any future fraud on your credit report
    • Here is the link from Experian about fraud alerts and credit freezes.
  • Dispute the listed accounts not just on your Experian but also Equifax and TransUnion reports.
    • Disputes aren't quick fixes and can take time.
    • Disputing an item once might not be enough and will have to dispute the same listing multiple times to get it removed. Providing proof like a police report might not even get it removed.
Doing all that takes time. In fact it can take years dealing with all the issues from identity theft. Not to mention the time it will take in proving your identity while applying for credit because of the fraud alerts or freezes.  

I understand Experian wanting to make more money off of you and I than they already do.  I just don't think they should use the words not worried when it comes to identity theft.

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