DING DING... the bell has rung for round 1...... Ok just chill out and read what I have to type....... Most of your clients that have credit difficulties
ARE NOT IN NEED OF CREDIT REPAIR.......
especially if the mortgage professional is willing to spend some time and understand credit.
Now, I will tell you that 90% of the mortgage peopele
DO NOT KNOW HOW TO READ A CREDIT REPORT
and it isn't their fault. So much has been placed on credit scores that most people don't know what it is (relax this isn't another post on what makes up your score). Let us look at a few examples.....
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Couple has 20 pages of collections and just horrible credit. Some of it is just and some of it isn't. As a mortgage professional; I would definately refer this couple to a credit clean up/counselor. I mean let's face it, I don't have the time or energy to deal with this one.
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Guy has a bankruptcy 3 years old. There are still many things on his report that are in his bankruptcy (this is very common and something that I see 10 or more times a year). This case is easy and the mortgage professional should write the letters for the client along with copies of the discarge papers and list of debts (I actually have a form letter where I fill in the blanks). This person in 30 to 45 days has amazingly gain on average 80 points on his score.
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Client has a low 500 score. Bankruptcy 5 years ago. Maxed out on all credit cards and has what may be a rolling 30 day late for 5 or 6 months on the report. BUT, the lates are over a year old and this person also has lates scatter here and there and a 30 day late from last month.
SCAM ALERT
A credit repair company claims that they can raise this person score by 50 points plus in 30 to 45 days!!!
By just disputing the late pays!!!!
As the rep said, most creditors don't even bother answering disputes. Which may or not be true. BUT, my first job out of college was as a collection/credit manager.... let me tell you if you where a PITA client i answered your dispute and now had a skip trace on you to come after you. If you were polite and nice and just bad luck.... I probably let it slide....
So ready for the TRUTH
Can credit repair companies help..... YES, I believe they can in limited cases and when you have time to make it work.... after all your score goes up if you make your payments on time. But, in a lot of cases and examples 2 and 3 and perfect.... it is a scam. A sales job..... How do I know.....
well I am case #2
and case #3
Do you know that we as mortgage professionals have a tool availible to us from our companies? It is a credit simulator and it is accurate to 10 points. In the case #3, I ran this and removed the 30 day lates.... and got
ZERO IMPROVEMENT
Why???? The lates are over a year old... impact is zero.
Now, remember this is a maxed out credit card situation..... we pay down to 50% balances and we got
77 point improvement
What will the client do???? I guess they will pay the fees to the credit repair company and then whine in 2 months that nothing has happened. Remember this...... if you are really late, these will not be deleted. You can not delete bankruptcy or foreclosure or tax liens. But if there are errorsand you don't have the documentation to prove it; it might be worth the 200 to 300 bucks to allow a credit clean up company to help you.
That is your call.
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