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Is Credit Repair Really Ok? or are we setting up our clients to fail?

By
Real Estate Broker/Owner with Azure Tide Realty and Pamela Kemper Florida School of Real Estate

I appreciated hearing from one of the ActiveRain members regarding my invitation to join the credit repair group. 

The comment was "I think credit repair is ok as long as it's helping people remove or correct bad information.  I do have trouble with the concept when it's used to remove legitimate and deserved derogatory entries."

What credit repair is really about is keeping the credit reporting agencies and the creditors reporting information about consumers to the bureaus accountable to the laws that are in place to protect the consumer. 

Legitimate credit repair operates based on and complies with the rules and regulations governed by the Federal Trade Commission, the Fair Credit Reporting Act, the Fair and Accurate Credit Transactions Act, the Fair Credit Billing Act, the Fair Debt Collection Practices Act, and Health Insurance Portability and Accountability Act.

Actually the government is so well lawed and ruled out regarding credit repair that it does make most people's heads spin.

If you find yourself asking "does this person have the right to have their credit improved?", please remember that America you are innocent until PROVEN guilty.  And this is true for what is reported about you and your clients credit report.

Unfortunately, most people fall victims to what is reported about them.  And what is being reported is most often in error.  Odds are that even if an account belongs to a person, there are errors within the reporting of that account.

Credit is a serious issue.  So if someone is going to report information about an individuals credit, they have a LEGAL obligation to make sure that EVERYTHING reported is correct.  And if they cannot verify ALL the information reported, then the consumer has the LEGAL RIGHT to demand that the information be removed.

As a realtor or lender, you are not in the business of passing judgment on your clients pasts--regardless of how correctly or incorrectly the information is being reported.  Your goal is to represent the client in a real estate transaction.  You really have no idea nor is it your job to determine what should and shouldn't be on the person's report.

What you should do is refer the person to a legitimate credit repair.  Legitimate credit repair is more than removing negative items.  It is about guiding individuals to using credit wisely--such as the percentage of debt they charge on a charge card, etc.

What credit repair can't do is get a buyer qualified who is currently not financially making sound credit decisions or is currently experiencing problems paying bills.  Credit repair will not work for those clients.

But if you have leads that are currenlty financially sound but still can't get a loan because of what has been reported about them in the past, consider sending those clients to credit repair.  You'll be amazed at the gratitude your clients show you when they suddenly have hopes to reach the American dream of home ownership.

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