My primary purpose for this post is to get an idea of the views on credit repair and preconceptions of credit repair as it relates to the mortgage industry. Although the majority of Credit Restoration Consultants referral sources stem from the mortgage industry, there are many professionals who have questions as to whether they should refer their valued clients to such a company. So, whether you are a mortgage consultant, CPA, financial advisor, immigration attorney with credit challenged clients or the average consumer, I invite comments on your experience.
1) Have you ever used a credit repair company and what was your experience?
About one third of our clients have used another credit repair organization or have come to CRC after attempting their own credit repair. In many cases their experience was less than favorable. The fact that anyone can dispute their own derogatory/inaccurate information or hire the services of credit repair company to do so has created a deluge of "credit repair specialists". Some of these companies have represented a guarantee of improving the clients credit profile while others were here today and gone tomorrow. So if as a loan consultant you have run into such companies, it has probably discouraged you from utilizing such a company in the future. Let's look at what one should look for in a credit repair company before referring a client to them.
First and foremost, research the credibility of the company with the Better Business Bureau. What is their rating? How many complaints have they had and how were they resolved? How long have they been in business? Can the client meet with those they will be working with in their office? A step further would be to check the company with the States Attorney of that particular state. Remember this is a company you are going to refer your clients to.
How do they explain their services? Are they informing prospective clients of their rights? Are they making guarantee's as to a specific out come of their efforts? (By law a credit repair organization is obligated to inform their client that they can dispute the negative/inaccurate information themselves and that no credit repair company can guarantee any specific result.) Do they give the client a realistic expectation of the possible results?
What means will they use to dispute the negative, derogatory, erroneous information? Are they only submitting disputes to the three major credit reporting bureaus or are they also disputing with the creditors, collection agencies, and public record holders directly? Are they simply sending off a written dispute letter or are they entering disputes electronically, in writing and verbally? Are they a low cost, low effort organization keeping their clients on the hook for monthly charges with minimal results, or do they have a specific time in which services will be rendered, achieving the mutual goal.
2) What are your fears in referring your credit challenged clients to such a company?
Many of my current referral sources in the mortgage industry initially had concerns with sending their clients to a credit repair company. I understand completely, I would too. Lets take what seems to be of primary concern. Will I get them back? Why would anyone send a credit challenge client to some outside source if they wouldn't guide them back to you after completing restoration of their credit.
Credit Restoration Consultants has always maintained a strict policy in sending clients back to each respective referral source. And why wouldn't we? As in any industry, violation of a referral sources trust would absolutely kill that relationship, and possibly future relationships with others.
Next, fear of loosing a sale or not closing a loan in the future with that client. I understand this too. Often we hold on to a client's information thinking our advice to rectify the situation on their own or some magical event will bring them back, ready to move forward. How many times have we told ourselves this only to end up with a stack of outdated information, follow up with the client, and find nothing has changed. The simple fact is that a different action needs to be taken to net a different result. This seems to be one of the hardest changes for our new referral sources to take. To trust their reputation, their loan, their clients trust, to another. One hand we have a client who doesn't meet loan requirements and probably won't anytime soon, and on the other, we often have a loan worthy client after 45 days to six months.
3) Do you think you would close more loans by referring clients who are not currently loan worthy or need to improve their credit to get a better loan?
Yes, trust in a reputable credit repair organization. Many of the current loan consultants we work with are thriving now, even during this "credit crunch", because they took the time to evaluate us and refer their clients. As with all relationships, when the client wins, everyone wins. And the bottom line is Better Credit equals More Closed Loans.