I was asked to write an article about should a consumer try to fix their credit themselves or hire a credit company to help them.
While at first glance an article on this subject from someone who has a company where consumers pay them to help their credit seems like an article like this would be very one sided. However as a small company we advise many clients’ different avenues to pursue depending on their unique situation.
Many times I have told clients they do not need my help and give them some free advice or there situation is so dire based on circumstances that they need give consideration towards filing bankruptcy. So please understand that this will be part one of an article that will review both sides of the argument and as an adult you can take in this information and make an educated decision that benefits only you and your family. This article will also teach you what to look out for when choosing a company to help you with your situation.
While I will try to get as specific as possible in pointing out the pros and cons for both sides understand that everyone’s credit file is unique so ultimately your file would need to be reviewed individually for the most detailed assessment. But let’s lay some groundwork for the best way to absorb and understand this article and material.
Federal and state law requires a credit company to tell you in writing that this is a service and there is nothing a credit company can do that you cannot do yourself. A good company should also verbally tell you this during your conversation with them.
An ETHICAL credit company will also tell you this verbally so if you are shopping around for a company to help you and this is not mentioned remember this can be a tell-tale sign of a company that only wants your money and may not have your best interest in mind.
A standard statement that is added on while yes it is part of a sales pitch it is 100% truthful which is, “just like you can fix your own car or represent yourself in court it is your right to do so, but be wary as doing it yourself can cause more problems than help if you do not know all the steps and complications that can arise from trying to fix it yourself” . However both examples are dealing with complicated machinery or steps where it is very possible you can do more harm than good.
To generalize the legality of what credit companies have to say, let’s understand what that means. Whether it is an account on your credit that is not yours, an account that should not be on your credit as it is over the 7 year mark or something as simple as your named is spelled incorrectly. All of the above is considered and labeled as a “dispute” or considered “Credit Repair”.
A bankruptcy (generally speaking chapter 7 )stays on your credit report for 10 years, however the negative accounts that are included in the bankruptcy stay on the 7 year timeline. So for example, you haven’t paid many bills for 4 years, you get sued by a car lender who repossessed your car 1 year ago. By Filing bankruptcy chapter 7 if approved if the negative accounts have not been paid in 4 years then they fall off your credit report in 3 more years and you are totally absolved on that debt and it goes away and you do not have to repay it.
The car lender who sued you, that account/judgment which also can get put under bankruptcy where you do not have to pay it and it gets dismissed would fall off in 7 years as it is labeled as a new account.
A tax lien (state of federal) or any student loans as majority are backed by the federal government are the two things that cannot be placed in bankruptcy, everything else can which includes medical bills, apartment fees, credit cards, car repossessions, cell phones etc.
So that is some of the basic credit issues and their timelines.
When it comes to the decision of do it myself or hire someone what I typically have seen in my 11 + years in this industry is when a consumer tries “doing it themselves” then end up making my job harder thus me adding an additional fee for the extra work.
For example the people I come across who contact me saying they tried credit repair on their own typically go online and “click a button” on the preset boxes in the dispute section on the website.
The credit bureaus said to them and the public, “oh you’re disputing something on your credit use our electronic system that confirms the data you are disputing with what we have on file so we can confirm it electronically and not expend ANY money on actual humans that can conduct an investigation since our system just verifies the information you are disputing with the data that we are reporting.
SO while ALL GOVERNMENT AGENCIES are saying there is nothing a credit company you hire can do that you cannot do yourself. BUT then why are consumers being pushed to work in a system that is designed to verify and not investigate? And what if one of their “box disputes” isn’t your issue?
To be continued…