Credit repair from an attorney’s perspective.

Credit repair is quite popular these days. Or, at least the term, itself, is popular.  I make that distinction because it means many different things to many different people. It should come as no surprise that as an attorney working in debt related fields such as bankruptcy, foreclosure defense, etc., credit repair has become a topic about which my clients frequently ask. I wanted to take the time to write about credit repair in a bit more detail.  In this article, I will:

  • explain what credit repair is and what it is not
  • identify when you should and when you should not conduct credit repair yourself
  • provide examples of when to hire an attorney and when your should not to hire an attorney
  • make my recommendation for general credit repair needs

What is credit repair?

The Federal Credit Repair Organizations Act broadly defines credit repair [organizations] as:

“…any person who uses any instrumentality of interstate commerce or the mails to sell, provide, or perform (or represent that such person can or will sell, provide, or perform) any service, in return for the payment of money or other valuable consideration, for the express or implied purpose of– (i) improving any consumer’s credit record, credit history, or credit rating; or (ii) providing advice or assistance to any consumer with regard to any activity or service described in clause (i)…”

What does that legal mumbo jumbo mean?  It means credit repair is any activity by anyone intended to help improve anyone’s credit report or credit history. Well, that’s pretty broad, huh? Let’s dig a bit deeper and talk about the different forms of credit repair.

What credit repair is NOT?

Credit Repair is not necessarily a debt solution.  It could be if the organization assisting you also performs some sort of debt settlement or restructuring.  However, credit repair companies typically stick to disputing and challenging negative items in your credit report. Credit repair is not a legal service designed to judiciously compel an entity to comply with the law.  Instead, it’s a process through which companies merely ask creditors and credit reporting agencies to comply with the law through systematic disputes following the rule book written by credit bureaus, creditors and lobbyists.  In other words, credit repair is effective until legal intervention becomes necessary.

Do it yourself? Not unless you have time, energy and the patience of a saint.

Don’t get sucked into the trap of the “do it your self” credit repair idea.  This is an idea spawn by the opponents to credit repair companies, which include the Federal Trade Commission, the Credit Bureaus and most creditors and collection agencies.  These opponents have a vested interest in you being unsuccessful in your credit restoration objectives.  Why?  Money. When you have poor credit, you pay high interest rates.  When you pay higher interest rates, banks make more money. When banks make more money, they can afford to sell their debts to more aggressive collection agencies and they pay more taxes.  When the government revenues increase, so do the budgets of government bureaucracies like the Federal Trade Commission.

In addition to this reasoning, there are “do gooders” that suggest you repair your credit yourself.  However, they drastically underestimate the time and energy it takes. For example, you have to research the Fair Credit Reporting Act, the Fair Debt Collections Practices Act, the Fair Credit Billing Act among other complicated federal and state laws relevant to your credit situation.

In addition to the complex laws you must navigate to successfully repair your credit, there is a subtle presupposition that the disputes you submit will be honestly, ethically and / or legally processed by the receiving party.  Unfortunately, there are many studies out there indicating the exact opposite. You may be proud of yourself for the dedication and effort you put into the process, but ultimately disappointed with the results you obtain.

Hire an attorney? Well, let’s think about this.

There are a lot of attorney’s out there that supposedly specialize in “credit repair”. Also, there are a lot of credit repair companies posing as law firms.  Both use terms like “attorney founded” to peak your interest.  However, this is merely a marketing gimmick. For example, if you hired a real attorney to repair your credit, you would be charged the same hourly rate as if that attorney were filing a lawsuit on your behalf.  So, it makes no sense to hire an attorney to repair your credit. This isn’t the full story, though.

There are indeed legitimate reasons to hire an attorney for credit repair related concerns.  For example, if your credit report contains prima facie evidence of a violation of your rights pursuant to any relevant law, only an attorney can legally represent you should you decide to file a lawsuit. Generally, an attorney will take these cases on a contingency fee basis. So, don’t get tricked by the “attorney founded” non-sense.  On the other hand, keep an attorney in mind should you need to escalate your credit repair objectives.

Hire a company? Probably the best bet, but proceed with caution.

I think the down side to hiring a credit repair company is obvious to most people.  There are a ton of scams and ripoffs in the credit repair industry. The evils on both sides of the fence perpetuate more evil.  For example, when the credit bureaus or creditors blatantly violate your rights, brazen credit repair companies expand their “techniques” into questionable territory. When credit bureaus and creditors catch on to these techniques, they implement in-house policies or lobby for new laws to avoid the new credit repair techniques.

So, what would I recommend? Credit Repair Connection, LLC

First, I want to say I’m not condoning, advocating or representing the use of anyone for any purpose.  However, of the issues I’ve encountered or problems with credit repair companies my client’s have brought to my attention, Credit Repair Connection, LLC seems to at least try to address them. Credit Repair Connection is like Angie’s list for credit repair, mixed with an Amazon style review process, followed by an online reverse auction.  You create your profile with them, then companies submit bids to you after which you can evaluate the companies competing for your business and compare them to one another.

credit repair connection

Probably the best way to find a quality credit repair company. And it’s free!

Final thoughts about credit repair.

If you have debt issues or your rights were violated, please contact me and I’d be happy to review the situation.  If you need credit repair, it would be worth your time to check out Credit Repair Connection. Also, please comment below to confirm or contradict my opinion of this process. Everyone can benefit from your voice!