When it comes to credit repair, the best strategy may be to do it yourself.
One of the questions I get asked most from my peers is…
Why don’t you start a credit repair service? …you’d rake in the cash!
Lucrative as the industry may be, there’s a good reason I have no interest in starting a business like that. The industry stinks from the neck up.
You see the advertisements in newspapers, on TV, and on the Internet. You hear them on the radio. You get fliers in the mail. You may even get calls from telemarketers offering credit repair services. They all make the same claims:
- “Credit problems? No problem!”
- “We can erase your bad credit — 100% guaranteed.”
- “Create a new credit identity — legally.”
- “We can remove bankruptcies, judgments, liens, and bad loans from your credit file forever!”
Do yourself a favor and save some money. Don’t believe these statements. Only time, a conscious effort, and a personal debt repayment plan will improve your credit report. Anyone who tells you otherwise is lying or scamming.
Which is why I teach people HOW to repair their credit in the Credit Millionaire Book and Home Study Course. You can easily have someone else do it for you by handing them the program and telling them to follow the system. At least that way you know the strategies are ethical, and what is being done and said on your behalf. But I digress.
I was talking about credit repair scams.
Everyday, companies nationwide appeal to consumers with poor credit histories. They promise, for a fee, to clean up your credit report so you can get a car loan, a home mortgage, insurance, or even a job. The truth is, they can’t deliver. After you pay them hundreds or thousands of dollars in fees, these companies do nothing to improve your credit report; most simply vanish with your money.
I’ve heard it time and time again from customers. They’ve been burned before. I was talking to one student who had paid $30,000 to a company to get his credit repaired. Ridiculous.
I also never recommend a company to repair credit. I just can’t bring myself to do so. See, if I don’t know what they are doing (and I’ve asked, none of them would tell me, citing trade secrets), then how do I know they aren’t making illegal representations or scamming? I don’t, so I won’t recommend one to my students.
If you’re reading this and you run a credit repair service, and you’d like an unending source of leads from my readers, be prepared to send me your business operations manual. I’m always willing to consider changing my stance on this particular issue…
Because so much of the industry stinks, I don’t want to be a part of it by opening my own company. However, I recognize that it might be worth it to hire someone to clean up your credit, from a time v. money perspective, so here are a few tips and warning signs for companies to avoid.
- companies that want you to pay a LOT for credit repair services before they provide any services.
- companies that want you to invent a new identity by using a Federal Employer Identification Number (and EIN) instead of your social security number. This is a federal offense.
- companies that don’t share with you that you can do this for yourself
- companies that recomed that you not contact a lender or credit reporting facility directly
Here are some things you should know.
It’s a federal crime to use the mail or phone to apply for credit and provide false information. You can be charged with mail or wire fraud. It’s a federal crime to lie on a loan or credit application. It’s a federal crime to misrepresent your social security number. It’s also a federal crime to apply for an EIN under false pretenses.
Also, under the Credit Repair Organizations Act, credit repair companies annot require you pay until they have completed the service they have promised! Read the full text of the law
