Credit repair scams come in all forms. Stealing your own identity, which I talked about last time, is just one of them. My friend who quit the business told me about three more things that credit repair services do, one of which is downright dirty.
One thing is just salesmanship: convincing the customer that he could accomplish things that an ordinary person couldn't.
Well, to some extent, that might be true. His company certainly taught him exactly where to send letters to dispute an item on somebody's credit report, how to get debt collectors to stop calling, or what concessions a company might be willing to make, to take a bad mark off a credit report in exchange for paying off a debt.
You could look those things up and do them yourself. A good credit repair company really does save you all that time and trouble, but it's not like my friend had some secret handshake with the credit bureaus. Before he worked there, he was selling lamps and washing machines, for heaven's sake.
One trick was bluffing the credit bureaus. You know how you'll let somebody win an argument sometimes, just to get them to shut up and go away? He was taught to dispute everything on a customer's credit report, even if both he and the customer knew the debt was legitimate.
Credit bureaus are required to take every dispute seriously and answer in thirty days unless the dispute is clearly frivolous, so he made the disputes sound serious and sent them separately so it wasn't obvious he was disputing everything. If a husband and wife's names were both on the debt, he'd dispute in the husband's name, then dispute again in the wife's name.
If the customer had moved, he'd dispute that the address was wrong. Heaven forbid there was a typo. Then, after he'd disputed with the credit bureaus, he'd dispute with the original creditors. That'd be considered frivolous, except he'd change it around just enough and slip it through. Sometimes the original creditors had moved or the debt had been sold or they just didn't have time to get back to him in thirty days, and the bad mark would be removed for lack of response.
Is that honest? Well, I dunno. The laws are in place to help people who really do have mistakes on their credit reports. I got turned down for a credit card once because they said I was paying four hundred dollars a month for a mortgage. Huh? I rent a cheap little apartment. So I disputed and got it removed and that's what the law's there for. But it's lying to say you think you don't owe a debt, when you know you do. And come on, repeatedly disputing something to wear somebody down is frivolous, even though it may work.
At least disputing everything performed a real service, though. Some of the bad marks really did get removed.
But then there were the dirty tricks, which didn't actually improve the customer's credit at all. The customer was fooled into thinking his or her credit was better, just long enough for the credit repair place to say they'd done their job and collect their money. Kind of like fixing a used car to run long enough for the customer to test drive it, buy it and take it home, when it turns into a piece of junk.
Sometimes my friend would get lucky and a credit bureau would want more than 30 days to respond to a dispute. So the credit bureau would remove the item temporarily while they were getting their information together, then after they'd verified it, they'd stick it back in the report. But while the credit bureau was off verifying, the item would be gone. That's the report my friend was taught to show his customers, to "prove" the bad mark was erased. He knew it was probably coming back, but they didn't.
He even had a trick to remove all evidence of a bankruptcy.
First, he'd dispute anything on the report that mentioned a bankruptcy--old debts that were discharged by the bankruptcy, for example. Usually, companies didn't care about verifying those, because they couldn't collect them anymore anyway, so they wouldn't bother to respond, and the item would get removed. Or the item would go away temporarily for the reason given above.
Then he pulled the real trick. Bankruptcy records don't usually stay in your local courthouse forever, because there would be no room. After a couple years, they send them off to deep storage someplace. So he'd request to see the record and the courthouse would have to order it. While it was on its way, he'd dispute the bankruptcy with the credit bureaus. Of course, they couldn't access the records, because the records were missing from deep storage temporarily. If he could stall the courthouse to keep the records for thirty days, the credit bureaus couldn't verify it, and they'd need to stall, so there was a chance they'd remove the bankruptcy, pending verification. It didn't always work--required a lot of luck--but if he could even show a few customers that their bankruptcy was gone from their credit report, they'd pay generously for that kind of miracle.
Except as soon as the bankruptcy made its way from the courthouse back to deep storage again, the credit bureau could get it, verify it, and put it back on the credit report again.
My friend wasn't supposed to tell his customer that little detail. He'd already collected his money before then.
If You Can Stomach It, You Can Do It
You'll notice one thing in common with all those tricks above. My friend didn't need to be a lawyer or have any special kind of license or permit to do what he did. All he did was write letters, which you could do yourself.
Find a credit repair company that's honest and will write the letters for you to save you the headache and trouble, but that won't pull any dirty tricks to cheat you. This post and the last one will give you some ideas what to watch out for, as far as dishonesty.
Or look up all the addresses and write the letters yourself. You can get your credit reports free once a year or every time you've been turned down for a loan at www.annualcreditreport.com. They'll have addresses, and there are sample letters online and ebooks that will walk you through the whole thing. Dispute anything that's wrong. Maybe dispute an extra thing or two also, for good measure. You can decide where to draw the line. But at least you know you're not going to cheat yourself.
Previous Post: How to Avoid Credit Repair Scams
11:53 p.m. February 12
It's unbelievable what these credit repair places charge. My husband and I were approached by one who wanted to cahrge $3,000 for negotiating a credit card debt of $12,000.
10:46 a.m. February 13
theres a man just convicted here of making up whole fake identities and forging credit records for people and then using it to get car loans and mortgages. the people had to know they were in on it... you cant be that dumb.
1:00 p.m. February 13
I'm sorry but disputing things that you know are accurate and using loopholes and making a game out of improving your credit report is going about this the wrong way. Your credit's bad because you didn't pay your bills. Pay your bills and it won't be bad. There should be no way to improve your credit report other than doing what you're supposed to do and pay back what you promised.
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