Credit Repair. Should You Pay For It?

Plus, part of the reason these people have bad credit is because they don't know how to take care of it. If you slap them with some quick and dirty credit repair, jack their scores up and shove them in a house...they're just too likely to fall right back to square one and end up in foreclosure.

I find that the client's understanding of their credit and how to maintain it improves the longer we work on their report TOGETHER (I think that is key) and they see how easy it is to screw it up and how hard it is to get it back.

Jim - Greater depth...hmm. I can do that. Not right this second, but keep your eyes peeled :)

Nicolette - Basically, it sounds like you already know what to do. If the collections are valid, pay them. If the payments are late, bring them current. There is nothing you can do, legally, to remove past late payments or past derogatory accounts...they just have to run their course. But, the farther removed you are from the late payments and the past due balances the less and less effect those items will have. I have a link on my site that shows how long certain types of things will stay on your report even if they are closed/paid: http://www.knowyourhomeloan.com/Why_is_That_Still_on_My_Report.htm The more quickly you can bring your accounts current, the quicker your score will rise. If there are things on your report that are out-and-out wrong, whether they be accounts that were never yours or paid accounts that still show a balance, you need to dispute them directly to each credit bureau that is reporting the inaccuracy. You should see on your report XPN, EFX and TUC next to line-items. Not all 3 bureaus will report everything and sometimes one or two bureaus will report an inaccuracy and the other will not. You need to send certified letters (or you can dispute online) to each bureau that has incorrect information and provide documentation showing that the information is wrong. If you don't have documentation, it will be much harder, but not impossible, to get the information corrected.

Nicolette - Closed accounts drop off 7 years from the last time they reported to the bureaus. So, and this may not sound great, but if the last time something reported was, say, June of 2000, you may just want to leave it alone since it will go away in June or July of 2007, see? If you start paying it or disputing it or whatever, the company will start reporting it again and your 7 years will start all over again.

On the duplicates, I would dispute them. I'm honestly not sure if getting them pulled off alone would help, but I always get them taken off...if nothing else, it makes my clients feel better :)

Chargeoffs are basically a write-off from the lender. They assume at some point that they are not going to get any money from you, so they write it off as a loss. Now, you may see that same amount or something very close to it as another account...namely a collection, so watch out for thinking the chargeoffs are "gone". I'll be honest with you, I've never had a client negotiate on a charge off...they've either paid it or they didn't. You don't necessarily have to get rid of or pay everything on your report to qualify for a home...it really depends on where your scores are now and where you need them to be to qualify.