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Credit Repair Companies-The Other Side

By
Mortgage and Lending with Academy Mortgage, Reno, NV

 

 “Some Credit Repair Companies are a Rip Off” by Joe Petrowsky was a featured article the other day.  I found some of the comments reactionary and disturbing. Like all industries, there are good, ethical companies as well as companies with questionable ethics.

The good companies provide a worthwhile service at a reasonable cost.  Rainmaker Gene Mundt stated in most cases the client (with guidance from their lender) can do everything that a credit repair company can ... at no cost.” You don’t need a lender or anyone else to repair your credit. Although anyone can go to the FTC website and download sample letters to challenge items on their credit report, most will never find the time. Most will procrastinate and make excuses, and as a result, will never qualify to buy a home.

My opinion of credit repair companies was similar to most who commented on Joe’s article.  That opinion changed a few years ago. I was introduced to the owner of a credit repair company at a mortgage conference. He was working with many of the lenders and all gave raving reviews.  

I know a loan officer with a seven figure income, of which a large percentage is the result of credit repair. At most times, he has about 40 clients enrolled. He is providing a service. He tells those with bad credit, “someone is going to help you and it might as well be me”. Once their credit is repaired, are they going to shop the loan? Instead, they are appreciative and loyal to him. Without him, they wouldn’t be shopping for a home.

Rainmaker Karen Anne Stone said I don't think I have ever heard of a "credit repair" company that was worth what it was charging... or worth anything else, for that matter.

There are some builders who will take a buyer under their wing, so to speak, and over a period of perhaps six months, will improve their credit enough to enable to purchase one of the builder's homes. And... they do that for free... as a service from the builder.”

These builders are hiring a credit repair company. The buyer pays the credit repair company and the builder credits back the cost at the close of escrow. By the time the home is completed, the scores have improved enough to qualify. What is the builder’s profit? If you were a builder, would you invest $1,000-$1,500 to sell the home? The fact that the builders are willing to invest in their client’s credit repair proves there are reputable companies with systems that work.

In most instances, I can provide strategies for improving a client’s credit score without the help of a credit repair company. If the problems are more severe, I’ve found these companies to be a wonderful resource.  One of my clients raised her decision score by 93 point in less than 4 months with the help of a credit repair company. Another raised his score over 100 points in less than eight months. My biggest fans are those who invested in credit repair.

When you talk to your client about credit repair, and help them enroll with a reputable company, you are building a relationship. The restoration process may take a year, but in the end, you will be a hero. Not only will you sell a home or provide a mortgage, you will get referrals because you cared and took the time to help. Most of your competitors will be all too happy to let them walk.

Yes, your clients can challenge and correct mistakes on their credit report without the aid of a credit repair specialist. The big question is, will they ever get around to it, and do they understand the process well enough to be successful.  I doubt there is a lender, with more than a year in the business, who hasn’t seen a client sabotage their credit while attempting to fix it. Hiring a good, reputable credit repair company is the same as hiring someone to repair your sink, replace the missing roofing shingle, cut your lawn, or hire a Realtor to list your home. We are all capable of doing these things ourselves, yet we have no qualms about hiring a professional.

None of us likes to see our career choice minimized. In today’s real estate environment, we all face challenges on a daily basis. None of us are immune to criticism.  As lenders, Realtors, inspectors, and appraisers, we all believe we provide a worthwhile service. I am sure the reputable credit repair specialists feel the same way. There are good and bad in every line of work. I think we need to be careful how we use terms like "scammers", "rip off", and "low life". In the world of ever changing regulations, guidelines,   appraisal and short sale approval issues, you could be the next target of these terms.

 

 

 

 

 

 

 

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Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Thank you for the shot out about my blog. Hope to see more of your posts.

Jun 07, 2013 04:10 AM