Credit Repair VS. Credit Optimization

There is a big difference between credit optimization and credit repair.  Credit optimization focuses in on the fact that nearly 4 out of 5 credit reports include errors.  65% of a credit score is made up of items other than payment history (ex. revolving balance due vs. balance maximum allowed, inquiries, recency of delinquent events, etc.). Credit optimization performed by experienced lending professionals focuses on discrepancies in a credit report.  Credit repair often disputes actual delinquency that, if not countered by the reporting lender, must be removed.  In a lending environment where agency (Fannie/Freddie) loans are significantly more expensive for borrowers with less than a 660 FICO score (the new risked based fees start affecting clients under a 740 score- ouch!), many loan originators will face decisions on how to boost a clients score.  The old days included sitting down with the client and going over tradeline by tradeline what to do to improve the credit rating.  Now there are options like "rapid resolve" that are offered by some credit reporting companies that can improve scores, for lack of a better word, rapidly.  Going the credit repair route can improve the client's score, but are we creating bad borrowers with good FICO's?  This can result in defaults down the road and further trouble for us all.  If you are an FHA lender, you can have your ability to fund such loans pulled by HUD if they determine you have too many defaults.  Be careful when choosing to place any borrower in the hands of a credit repair company.