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Say NO to credit repair companies!
Credit repair companies should be against the law. There, I said it.
In working with clients for over 15 years, the one thing I see all too often is people having to wait longer than necessary to finance a home. The reason they have to wait is they've hired a credit repair company to help them build or re-build their credit profile. There are a lot of issues with this scenario, but the main one is money, and a lot of it, has been spent on something that you could've accomplished yourself for free. And to make matters worse, your credit profile isn't even close to ready, and, you still aren't prepared to finance a home.
So why are credit repair companies evil demons that need to be cast out? Here are the three things they do, how it hurts you, and what you need to do instead:
- The very first thing they do after getting you to commit to a contract and monthly fee with them is to place all of your accounts in “Dispute' status. Placing your accounts in this status makes your credit score much, much worse. Why do this when it's of no benefit to you? It's simply to make it look like they've done something to earn the money you're paying them.
So, you're paying money to make your credit worse?
- Next, they take all of your disputed accounts and attempt to make payment arrangements with them. For example, you have three accounts for $1000 each. The credit company will then negotiate an agreement to pay each of them $20 per month. When you pay them their monthly fee, they'll then take those funds and split it up between your three creditors; making those payments for you.
So, you're paying someone money to pay someone else your money?
- After the completion of these two steps, the credit company continues to take your money each month and distributes your funds to all of your creditors. They'll continue to do this until your accounts are paid in full. In the scenario above where there are three accounts for $1000 each; this equates until the dawn of time.
So, you're holding onto your debt for as long as possible?
So here's the result that you've ended up with:
- Your credit is now dramatically worse
- You're paying probably about $150 or more per month to this company, and, they're only paying $60 towards your debt. The rest of it is for their ‘processing' fees.
- You now have additional monthly debt, the credit company itself, and you're not getting anything out of them for the money you're paying them.
- You've caused your original debt to last longer because you're only getting it paid down 20 bucks at a time.
Now that you know how this all works, why in the world would you want to pay someone to make your credit worse and stay in debt longer? Doesn't make much sense, does it? Credit repair companies are a rip-off, a total scam and they need to be outlawed.
A recent client of mine worked with a credit repair company for three years. Over that period she paid them $9000 ($250/month). When I checked her credit report, her score was trashed, all of her accounts were in dispute status, and, there weren't any recently paid off accounts. When I requested a transaction history from her credit repair company it showed that over those three years only one creditor for $350 had been paid; the remaining $8650 she remitted for debt pay down had ALL went to processing fees. We've been working together for about nine months now, and her credit score is now 200 points higher than when we started. And most importantly in a few more months, she'll be ready to do the home financing she wants to do.
If you need help with credit repair, please do not hire a credit repair company. They'll make your situation much worse. Instead, contact me directly, and I'll help you create a plan to get rid of your debt and raise your credit score as quickly as possible.
Credit repair and guidance is a service I provide to you for FREE.
I hope this information was helpful! Feel free to contact me if you have any questions; I'm happy to help!
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Contact Wendy 7 days a week for more information:
Phone or Text: 321-794-5626
Facebook Messenger: @aloaninthesun