Credit repair is a service that is desperately needed. The credit bureaus report inaccurate information on 80% of credit reports. Half of those inaccuracies depress peoples’ credit scores. If you have a common name like “John Smith”, there is a good chance that someone else’s information is on your credit report. If the other John has bad credit, you could be in trouble. The problems on your credit report are fixable. Paying for credit repair, unfortunately, won’t fix the problem. Here is why:
The Credit Bureaus are wise to credit repair companies and won’t respond to their dispute letters.
As lawyers that sue credit bureaus, we are not a credit repair company; we are a credit repair law firm. We have deposed all three credit bureaus. Over the years, we have learned that each credit bureau has a department along with software that recognizes the telltale signs of when a dispute letter was created by credit repair company. Under the law, they don’t have to respond to such letters (more on that later). When they get such a letter from a credit repair company, they usually respond with a letter declining to investigate the dispute and telling you to contact the bureau, yourself.
Paid credit repair companies earn their money by sending letters; not fixing your credit.
They typically charge an up front fee to review your credit reports and then charge you another monthly fee to sending dispute letters on your behalf. Whether they fix your credit or not, you are still going to pay them. This is also how it works at Lexington Law, one of the very few “law firms” that fix credit. As long as you pay them monthly, they will send dispute letters on your behalf.
Paid Credit repair companies usually send letters that contain frivolous disputes such as “not mine” or “this account was paid” when neither is true.
These letters used to work, once upon a time, but not anymore. The credit bureaus have the right software and people to detect when they receive a frivolous letter. By law, they don’t have to respond to frivolous letters. Further still, there is a law called the Credit Repair Organization Act (“CROA”) that makes it illegal to lie to the credit bureaus to improve one’s credit standing. When a credit repair company sends in baseless disputes, its violating CROA. Make no mistake about it, the credit bureaus and the CFPB take a dim view on these kinds of violations and both are becoming more aggressive about enforcement.
The CFPB is cracking down on paid credit repair companies that charge up front fees or use the telephone in connection with selling its services to consumers.
Just asking Lexington Law as the CFPB has sued it in federal court for these violations. Lexington was probably sued because it’s the largest paid credit repair company in the country. If the CFPB wins, it could spell the end to Lexington as well as every other paid credit repair company.
The CFPB recently took aim at not only paid credit repair companies, but those who sell credit repair services.
Credit Repair Cloud is a software vendor that sells software to help people get into the credit repair business. The CFPB has sued it and its owner. Recently, the CFPB has subpoenaed a list of Credit Cloud software users. They are probably next in line to get sued for violating the restrictions against using a telephone in connection with selling credit repair services. No company is immune.
Think about companies such as Financial Education Services which is now known as United Wealth Education. It is a large multilevel marketing company that sells credit repair services as part of its services package. It has a large contingent of people who sell its services. If the CFPB can go after Lexington Law, Credit Repair Cloud and its users, no one who sells credit repair services including agents from FES/ UWE is immune from such liability. The CFPB is on a war path. You don’t want to be in its cross hairs. (Update May 25, 2022 – since the posting of the blog post, indeed, the FTC has sued FES for violations of the Credit Repair Organization Act and other misdeeds in connection with selling credit repair services.)
Credit Repair Law Firm that does NOT charge monthly is the solution.
A credit repair law firm that does not charge out of pocket for its services is the way to go. It only gets paid if it achieves results for you. Moreover, credit repair lawyers tend to write good letters that responded to by the credit bureaus. The only way to get your credit report fixed in a legally sound manner is to use a legally sound solution.
Call us at Credit Repair Lawyers America at (248) 353-2882 for a free, no obligation consultation. We are happy to look at your credit reports for free and give you advice on how we can clean up your credit. You can also email us for a free at [email protected]. Talk to us. Let us be your lawyers at no out of pocket charge to you.