Credit Repair Niche

[Chris W. Sutton]

Okay, humor me here! I have always considered the credit repair niche to be a scam. Basically, most credit repair reports advocate two methods of credit repair... write letters disputing all bad marks on your report so the bureau has to check them or take them off and getting a brand new social security number. Now, I don't care how you paint THAT picture, it is wrong and borderline fraud. It is against the law to lie to obtain a loan.

So, since this is a HUGE niche, is there some hidden secret or are there just a lot of people who like to paint outside the legal boundaries?

Just curious!

Take care!

[DeePower]

There is another alternative and that's to get a federal ID number for a company and apply for credit as a company. Chris you're right it's a huge market looking for a quick fix and there isn't any. The only way to repair credit is to start paying your debts off and make your payments on time over a period of time. Even if your great Aunt Mabel died and left you enough money to pay everything off including your mortgage, your credit score wouldn't improve that dramatically or that quickly.

Dee

[Chris W. Sutton]

There is another alternative and that's to get a federal ID number for a company and apply for credit as a company.

Actually, Dee, that used to be the case but banks and other financial institutions started making business owners sign personally for the company loans. That was a loophole that was quickly closed!

Take care!

[DeePower]

Nope you can get a business loan without a personal guarantee. And you can get a company credit card as well, but it's still dishonest. Anytime you misrepresent yourself when applying for a loan or credit it's fraudulent.

I have a background in finance and an MBA. I can think of a number of ways to "repair" credit but none of them are ethical.

Dee

[Chris W. Sutton]

Hey Dee,

I've always had to personally sign for a business loan but maybe that was because the business was fairly new. In any case, if someone that was as nice as you came to me for a loan, I'd just empty out my pockets with no questions asked!!!

Take care!

[DeePower]

Awww. gee whiz. You're so sweet.

I have to ask - why the western wear? Personally I think you look adorably craggy. I live in AZ and people wear cowboy hats, jeans, boots, and stuff all the time. It's a good look.

Dee

[Chris W. Sutton]

Well, Dee, I grew up in Texas and was always rather "western" when it comes to dress. That particular picture was taken in a "classic photo" shop that specialized in the old west! I have always had a fascination with the gunslinger days and I think I was born in the wrong century.

My main problem is my split personality. I can't decide whether I am Chris W. Sutton, the Hillbilly Marketer or Wyatt Earp!

Take care!

[Emailrevealer]

I have corp credit without personal guarantees. You just have to build corp credit.

There's a lot more to credit repair that just writing the letters or getting a new #
Theres's the statute of limitations, goodwill letters and validation letters.
It's easy to screw it up if you do it yourself.


There's also ways to increase your FICO score.

[Bill Farnham]

Chris,

What model rifle are you holding in your avatar picture.

It's making me drool...

KJ

[Ted Kopelli]

There is more to it than deliberately removing valid marks against your credit.

There are legitimate companies out there that will remove damaging entries even though they are not late payments or defaults. For every inquiry, your credit score can go down 5-10 points.

Stale entries that you have paid still showing accounts open also lower your score. There are DIY plans out there but the paperwork is horrendous.

I would rather pay a team of attorneys $350 to get my credit score to the max. Plus if they cannot get you at least 25 points, there is no charge.

On the other side, creating a corporation and getting a corporate credit card does not show on your personal credit return. Your corp can borrow money form you personally and you can report the excellent payment record to D&B. The more positive entries on D&B, the easier it is to get corporate credit.

There are lots of ways to do lots of things and they can be above board. Too many people jump to the conclusion that anything with credit report in it is a scam. It just isn't so.

Ted

[Chris W. Sutton]

KJ,

I sure wish you hadn't asked that because now everyone who sees that picture is going to know that it was a prop. My wife won't let me have REAL rifles!

It was a prop that, I believe, was made to represent the Winchester .30-30 but I wouldn't swear to it.

Way to go, KJ, now people are going to start thinking I'm not a real hillbilly, either!

Take care!

[Bill Farnham]

Chris,

Your secret's safe with me.

I'm just an avid shooter and was curious. I like the hat too. I won't ask...

All the best,

KJ

[Marhelper]

The main idea in seeking to repair your credit is to write letters appealing 'er begging them to wipe out the bad reference. I guess some people are willing to pay others to tell them to do that.

[Chris W. Sutton]

Okay, I don't think I made myself clear here. What I am talking about is writing letters to remove notations that are VALID. It seems some credit repair books tell you to write disclaiming these valid notations on the assumption that a lot of the creditors will not respond to the query.

[Emailrevealer]

Originally Posted by Marhelper

The main idea in seeking to repair your credit is to write letters appealing 'er begging them to wipe out the bad reference. I guess some people are willing to pay others to tell them to do that.

Marhelper there's a very specific proceedure to fiollow and you could screw it up doing it yourself if you just think it's "begging".
You could wind up "begging" them to wipe out a debt that's already beyond SOL or validate a debt that was otherwise invalid. Or even make an offer of settlement od a debt out of SOL and wind up reopening it.

It's really easy to mess yourself up in all this.

[Emailrevealer]

Originally Posted by Chris W. Sutton

Okay, I don't think I made myself clear here. What I am talking about is writing letters to remove notations that are VALID. It seems some credit repair books tell you to write disclaiming these valid notations on the assumption that a lot of the creditors will not respond to the query.

It's not a valid debt until its been validated.

If its an old bad date just asking the creditor to validate the debt could get it removed from your credit report.
If they cannot or will not take the time to validate the debt it has to be removed from your report.

There's nothing dishonest or unethical about it.

[Tom Sheltraw]

Credit Repair is my specialty since 1991. What it comes down to is that there are Federal Laws designed to protect you from the inherently flawed credit system. It is estimated that 75% of ALL credit reports have errors. Those errors cause harm every day to unsuspecting borrowers. The system works like this:

You get your report. There is a "Real" error on it. You write a letter to the credit reporting agency. They in turn send a request to the creditor asking to validate the debt. The creditor sends back and says, "Yup, it's good" and you are told it stays on your report. What a system. But, there are ways to force a correction of a bad entry.

Now for Chris's original question. Yes it is unethical to say a valid debt is not correct but it IS ethical to ask for a debt to be validated. The law says that a debt not contested is a valid debt. It also says you have a right to request the debt be validated. Is following a federal law unethical? Saying I never borrowed from Sears when I did is wrong. Asking Sears to validate the debt is not only legal, ethical but SMART!

Now I tell people that if the debt is current and correct, why waste time asking for it to be validated. I've read in other post that a debt might be beyond the Statute of Limitations. This is true on many credit reports but going out 5 or more years it's hard to remember when a debt first went bad. I had a customer with a 12 year old debt on his credit report because the scummy company re-entered it at 10 years to look like new.

Believe me there are more un-ethical creditors then debtors. Add to that collection companies and the average debtor is in a world of hurt. And the companies that do the un-ethical credit repair tricks rarely have lasting success on the reports they work on. Getting a legitimate item removed this week only means it will be back on next week.

One last point, if you do owe Sears say $450.00 and they report $700.00, why would it be un-ethical to ask for the debt to be validated. Should you not know WHY it is $700.00?

And we haven't even touched on the Credit Score. Or your Medical Credit Score. Or Inquiries.

Hope this helps.

Tom

[captivereef]

it can work but usually on older accounts. I was a mortgage broker for years and did it for myself and clients, for free. There are tricks to it but the companies do what you can do for free. You are just paying for the convenience of having someone do it for you. Kinda like having the neighbor kid cut your grass.

But it can and does work, you just have to target older accounts.

[Chris W. Sutton]

Okay, points well taken! I see now that the niche is not a total scam but there apparently is a lot of abuse in this particular niche. I learn something new every day! Thanks for all the great comments!

Take care!

[Frank Bruno]

Hey Chris great topic you bring up....

In the past I've developed one of the largest investigative people search sites in the world and I have an intimate knowledge of how Social Security numbers and credit work and there's a few things that you should know.


One thing I should clarify, if you already have a social security number you can only get a brand-new Social Security number LEGALLY under certain circumstances such as identity theft, and as a domestic Violence victim.

If you were to legally change your Social Security number or even obtain one illegally your personal identifying information would still be cross referenced through the credit bureaus, motor vehicles, and the IRS and It would still show up both numbers on your credit report. It will actually flag your report as high risk and spit out both numbers cross referencing you with all your accounts, addresses,etc..

Many times getting a new social security number will create more problems than solve your problems because then you become not only high risk but you can create technical confusion within the system which will only can hinder you to what you want to accomplish.

Frank Bruno

[NoBoss]

Chris....

There are good reasons why ' credit repair ' has a negative image.
The rascals earned it !

But that doesn't mean they are all scammy. Some most certainly are
not. And we would use them if we needed help and didn't know what
to do or didn't have time to do it.

My experience has been they aren't doing anything that I can't do
myself. Its just a matter of learning from those that know what they
are talking about.

You may find it interesting to know the FTC filed complaints against
seven credit repair companies yesterday. This is not the first time nor
will it be the last time.

The FTC, along with agencies from 22 states, is asking the judge to
stop these companies from operating any longer. With further prohibitions
including refunding all money to former customers.

The Feds are charging them with Fraud because, for one thing, they
promise to wipe credit reports clean of all damaging info PLUS even
info that is ACCURATE. Here is a quote from one of the FEDS in charge
of Consumer Protection:

" Companies that promise they are able to scrub your credit reports
of accurate, negative information for a fee are lying, plain and simple."

...Doug