Credit Repair - ???

B-Line · #1 08-06-2007, 07:15 PM

Greetings folks.

So this weekend, a couple friends of mine got into the discussion of FICO score and credit repair.

I am trying to advise my friends to do whatever they can to repair their credit and get as high a FICO score as possible, as it will save them TONS and TONS of money on things like, auto financing, mortgage's, etc.

I want to help advise them, but I don't know much about repairing credit. I know there are companies that do it but I'm not sure how well they work, what they charge, how long they take, etc.

So if anyone has any information, good, bad, indiffrent, or even a lesson on how the companies go about repairing the credit, I would appreciate it.

I seem to recall, they harass the companies that give bad credit reports until they stop reporting it, or something to that effect..

So please, chime in.... Tell me what you know.. Who to use, who to stay away from, etc.

B

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Quicksilver · #2 08-06-2007, 07:20 PM

The only answer i know of is the simplist of them all Stop spending money on anything you don't need. Get really serious and cut back on everything down to the bone. Cut up all but one credit card and only use that if you can pay it off each month. Next pay off all the bills starting with the smallest as fast as you can. It's gonna hurt at first. (like buying a house) But when it over it's a good thing. (I love a FICO of 800)

LVR · #3 08-06-2007, 10:43 PM

Not sure about USA, but principles we use should still apply.....

There is usually a central credit reference agency (Baycorp in Australia) that keeps a record of any bad debts you might have incurred. The ones to look out for are the telco's who smack you for a late bill payment by registering you on the agency. They know it impacts on your Credit Rating, so that's why they do it.

Generally, the first thing to is to obtain a copy of your own report (by contacting the agency direct) and assessing what, if any bad debts you have. The only way to remove bad debts is to 1. pay it, or 2. wait (in Aus) 5 years. Once paid the company should remove the reference.

You can still obtain mortgages/loans with bad debt by using Low Doc products that cost more (say an extra few points in interest) but if this is the only way to get what you want then the cost is insignificant compared to missing out. It also allows you to then demonstrate a good credit rating over the period of time you have that loan.

If the question is related to bad debts as in too many, then you need to talk to a broker to ascertain the BORROWING CAPACITY. Usually the killer in servicing calculators are the credit cards, and store cards. They take up a lot of the avail cash at a high interest rate, are usually never paid off and the debt has to be allowed for in the liabilities.

So, first step is eliminating credit cards over say $2500 in limit, and store cards completely.

As for as a savings plan, I personally am not in favour of them. You can make more money by buying and selling a few investment properties than you'll ever save..... but that kind of advice needs to come from a Financial advisor/planner

Cheers

PS. Keep in mind that each time you apply for credit, be it a credit card or loan, going around and submitting multiple applications is a mistake as each application is registered on your Credit Report and it can look like you are either being refused credit (hence the multiple applications) or are getting a number of loans (so they write down your serviceability)

motordavid · #4 08-06-2007, 10:49 PM

S,
Good advice for your friends...and, as QwkAg suggested, common sense as in
spend less, be smarter. One bit of inside dope: stop using all but one card, but
don't cancel any of those unused cards for a long time.

Here are some links; some of the links have motives, but all good advice,
if not earth shattering.
GL,mD

http://www.creditreport.com/info/cre...0&utm_term=819

http://homebuying.about.com/cs/yourc...rove_score.htm

GOOG has pages, but they all offer about the same basic advice...

LVR · #5 08-06-2007, 11:06 PM

Quote:

Originally Posted by motordavid

S,

Here are some links; some of the links have motives, but all good advice,
if not earth shattering.
GL,mD

http://www.creditreport.com/info/cre...0&utm_term=819

http://homebuying.about.com/cs/yourc...rove_score.htm

GOOG has pages, but they all offer about the same basic advice...

Here is another http://www.bankrate.com/brm/news/cc/20011008b.asp

Cheers

B-Line · #6 08-06-2007, 11:07 PM

Hey Guys,

The advice above is all well and good, and I appreciate the efforts, but it's not the info I am looking for.

There are actually services, they are called things like, Credit Dr. etc. that work for you to repair your credit.
I give all my friends that ask for advice the same lecture you are all giving me, I know how to maintain good credit as well.
-- But again, what I am looking for, is information on the specialists who REPAIR CREDIT..

Basically, there are laws about how, when, why, etc. a bank, agency, lender, phone company, has to report your credit. And the credit doctors know how to "work the rules" to the benefit of their client, to help repair the bad credit.

Again, I don't know the exact process, but lets say for example, you have a 30 day late payment from five years ago. If you ask the bank company to provide documented materials that you paid 30 days late, they have to, or your credit report gets fixed.

So, if the agent you hire to fix your credit, keeps asking them month after month after month to submit records, they usually get lazy, miss the legal deadline, etc. and they have no choice but to reconcile your bad credit report.

Again, I'm not sure exactly how it works, but THERE IS A SYSTEM to fix bad credit, beyond waiting 5 years.

B

x5GuyInLA · #7 08-06-2007, 11:48 PM

here's a google search of how credit repair works...maybe this will help...http://www.google.com/search?sourcei...it+repair+work

B-Line · #8 08-06-2007, 11:53 PM

Thanks X5guyinLA,

The below information is the type of stuff I was looking for. But I was also hoping to hear from someone that has actually done it, so they can tell me how successful it was, how much it cost, how long it took, etc.

B

Thanks to the many laws that have been enacted by our government for your benefit,, It is often easier and cheaper for a creditor or bureau to remove a derogatory item than it is to fight it. For them to successfully argue that a debt is yours requires them to find the "original" document and original signature. If the original document is in a warehouse in Alabama, it could get very costly and time consuming to find. And remember, if they can't find it and verify it within 30 days, it must be removed. Few creditors will spend hundreds or thousands of dollars in man hours to find a signature to prove you owe them money that they know they will never receive anyway.
This is the same principle that attorneys use every day to extract multi-thousand dollar settlements from companies that actually have no legal liability. It's cheaper for a company to pay $5,000 that they know they don't owe than $50,000 to PROVE they don't owe it! In a nutshell, that is why credit repair techniques work.... When you use the laws that congress has enacted (that we teach you), to dispute derogatory items on your file, bureaus and creditors alike often decide it is in their best interest to allow the item to be removed.

Quicksilver · #9 08-07-2007, 02:33 AM

I don't know B. But it seems like a mony making scheme to me. Can't this kind of thing be done by the average consumer who just calles up a lender and tells em listen; I keep getting this or that that says iou for this or that?

(Without admitting a thing) Listen we can get this off the books for X $. That's all i got.....

Quote:

Originally Posted by B-Line

Thanks X5guyinLA,

The below information is the type of stuff I was looking for. But I was also hoping to hear from someone that has actually done it, so they can tell me how successful it was, how much it cost, how long it took, etc.

B

Thanks to the many laws that have been enacted by our government for your benefit,, It is often easier and cheaper for a creditor or bureau to remove a derogatory item than it is to fight it. For them to successfully argue that a debt is yours requires them to find the "original" document and original signature. If the original document is in a warehouse in Alabama, it could get very costly and time consuming to find. And remember, if they can't find it and verify it within 30 days, it must be removed. Few creditors will spend hundreds or thousands of dollars in man hours to find a signature to prove you owe them money that they know they will never receive anyway.
This is the same principle that attorneys use every day to extract multi-thousand dollar settlements from companies that actually have no legal liability. It's cheaper for a company to pay $5,000 that they know they don't owe than $50,000 to PROVE they don't owe it! In a nutshell, that is why credit repair techniques work.... When you use the laws that congress has enacted (that we teach you), to dispute derogatory items on your file, bureaus and creditors alike often decide it is in their best interest to allow the item to be removed.

ravenheart · #10 08-07-2007, 08:55 AM

In an MSN.com article a few weeks back they said something very interesting - one of the things that determine the credit rating is how much of your total available credit you use, so if people already have a credit card they should pay it off, but not close it as it would lower your total available credit. If people start closing all sorts of paid off accounts it will actually hurt the credit rating. I guess, technically, you could still cut up a CC, just dont close it

All of this is from vaque memory - I am sure a search for the article would reveal more info.

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