Its no secret that Congress, the FTC and CFPB have identified credit repair as an industry that is rampant with fraud. While there are several good and legitimate players in this business, there has been and still are a pile of bad actors.
Congress Enacted the Credit Repair Organization Act which is aimed directly at the credit repair industry.
The Credit Repair Organization Act was created by Congress because many in the credit repair space took advantage of consumers by charging fees in advance of service, promised things that they knew that they could not deliver and many times, either engaged in fraud themselves or had the consumer engage in fraud, all to no avail.
In FTC v BoostMyScore.net, the defendant credit repair agency was accused of guaranteed that that for a fee ranging from $325 to $4,000 that it could raise someone’s credit score anywhere from 100-120 points in 2-6 weeks. These fees were illegally charged in advance. This case was filed in 2020, so it was not that long ago. Here are the problems with what BoostMyScore.net did:
- There is no way to predict the effect that one’s credit repair efforts will have on a credit score. The best (and most accurate) thing that a credit repair pro can say is if they get a negative item off of a credit report, that it may help the consumer’s credit score. The problem with credit scores is that they can be based on many different models that take different things into account and assign different weight to those factors. For example, FICO uses one method to calculate a credit score for an auto dealer and an entirely different set of factors if the consumer is shopping for a mortgage.
- Credit scores are very fluid. They can change daily with such things as new credit, new timely payments made and new payments missed that are recorded; outstanding balances increasing or deceasing. There are just so many things that go into creating a credit score, its just impossible to predict what will happen if a credit repair pro removes a negative item.
- BoostMyScore also promised people that it could boost their score and get them qualified for a mortgage by piggybacking their credit. This means that the consumer becomes an authorized user on an account with someone who has excellent credit. In some instances, piggy backing can increase one’s credit score, but not in the context of a mortgage. It just does not work with mortgage applications. Again, the FICO uses different algorithms/ credit scoring models for different situations.
In FTC v RMCN (2014), a credit repair company charged up front fees and was accused of falsely disputing negative items on a consumer’s credit report. These violations are more rampant than you might think. Bogus disputes are very popular in the credit repair space. Its been a large source of frustration to the credit bureaus and data furnishers alike, for many years. Disputing bogus information wastes a pile of time and money for the credit bureaus and lenders alike. In fact, a collection agency, Ad Astra got so fed up with it, it recently filed a lawsuit against Lexington Law, accusing it of flooding Ad Astra’s offices with bogus dispute letters with forged signatures. This case is currently still in litigation.
There is no shortage of cases to point to demonstrating the nefarious conduct of many credit repair companies. There are literally dozens and dozens of such cases. All of these cases should put you, a consumer, on alert that a credit repair company may or may not accomplish what you want to, in a legal manner.
Your better choice is to consult with a Credit Repair Lawyer that charges you nothing out of pocket.
A decent credit repair lawyer or law firm will be happy to review your credit report for you at no out of pocket charge. They will identify opportunities for you to improve and clean up your credit report from not only negative and incorrectly reporting items that you can see, but some that you may not even know about.
Check out our 3 for Free Program at Arizona Credit Lawyers
Arizona Credit Lawyers has a 3 for Free program. We will draft up to 3 dispute letters for you in exchange for your credit report. There is absolutely no charge to the consumer for this as we make our money by suing the credit bureaus and the lenders who screw up your credit report. Our litigation program has no out of pocket charge to you. Call us today at (248) 353-2882 or visit us at www.azcreditlawyers.com. You can also email us for more information at [email protected].