If you are looking to own a home, you've probably been approached by individuals and companies claiming the ability to "fix" your credit by removing negative and damaging information, even when it's accurate!
We've always had our doubts, so we asked an expert, Lelia Stone with White Star Mortgage, to give us her take on the benefits and risks of credit repair:
As a Loan Officer, I have seen thousands of credit reports and heard numerous stories about credit repair companies. Over the years, I have gained some useful inside information regarding these companies. I hope you find it useful as well.
Typically, these credit repair companies charge their clients upwards of $500 for their services which are ultimately short-term repairs. These companies, for all intents and purposes, commit “legalized blackmail.” Their services can at times be useful, and in most cases their tactics are completely legal. The problem, though, is that they lead their clients to believe that they will no longer be haunted by their past credit issues. This is not the case!
The credit repair companies barrage the collection agencies with threats of fines and lawsuits. They can do this because most collection agencies are reporting negative credit to the 3 major bureaus illegally.
This is not to say that our borrowers do not owe these debts! The issue is that there are many “hoops” a collection agency must jump through before they can legally report negative credit to the credit bureaus. There are a certain number of letters and documents that must be sent to the borrower and they must be able to prove that they have made every effort to contact that person to make payment arrangements. Many companies prefer not to waste their time and effort in this manner, and simply report the bad credit to the bureaus. Most people do not know that the collection companies are supposed to make these efforts.
The credit repair companies simply continue to threaten the collection agencies until they finally remove the negative credit. This is a short term fix. If the debt owed is high enough, or the collection agency is angry enough, they will then begin to jump through the proper hoops and that debt will eventually reappear on our borrower’s credit report. These collection agencies also have every right to file any debt as a judgment. This appears in an entirely different section of the credit report and has been filed with a state or local court. That debt has not and will not “just go away.”
Lelia Stone, Loan Officer
White Star Mortgage
2621 Sandy Plains Road, Suite 201
Marietta, GA 30066
770-973-0629 ext 6
The best way to permanently fix your credit problems is to sit down with an experienced loan officer and create a real plan for addressing your credit issues.
We think the best time to fix your credit problems is right now! You can find a beautiful home from Home Pride that can be yours to own in a year or so. You'll even earn rent credits every month that will be applied toward your down payment.
Call Home Pride TODAY at 770-434-4242 to see any of our beautiful homes!