Of the hundreds (if not thousands) of credit repair companies across the country, Lending Tree interviewed president Jim Droske for this article.

Beware of just jumping on the internet because you might find a lot of firms that make excessive promises, said Jim Droske, president of Illinois Credit Services, a Plainfield, Ill.-based credit repair organization. “There’s nothing magical or mysterious about credit repair,” he said. “It’s based on laws.”

With so many scams and empty promises about credit repair, it is important to know what is legitimate and what is false advertising.

Top 7 Reasons Not to Refer a Client to a Credit Repair Company

When you are looking for a credit repair company to help your clients, there are a couple “less commercial” tactics you can use to weed out the bad apples.

#7: No Solid Plan to Improve Your Clients Credit

There are only so many times you can file a dispute on an account. If the credit bureaus do not get a proper response with new relevant information that proves an account is inaccurate then according to the FCRA they can call the dispute frivolous. Simply put, make sure ANY company you choose to work with has a dispute strategy to thoroughly investigate and resolve errors on your credit. Over the years we have tested many different approaches and defined our Proven Process to Repair Your Credit.

#6: Are Not Licensed, Bonded, or Insured

Your clients credit is the most personal financial information out there. Social security numbers, date of birth, credit card information, and personal data can be located on about any credit reports. Working with a company that is not licensed or bonded is a dead giveaway that a company is not interested in being compliant with local or state laws. For your clients protection make sure you are working with a company who is following all of the local, state, and federal laws to protect your identity. Like this! 

#5: Not NACSO Certified

NACSO National Association of Credit Services Organizations advocates industry standards and ethical business practices for the credit repair industry. Founded in 2007, NACSO services to streamline the industry through our Standards of Excellence seal. NACSO members promote compliance throughout the industry. Working with a credit repair company that is NACSO certified means they have submitted their contracts and businesses practices for compliance review. This level of transparency is something you need when working with a legitimate credit repair company. 

#4: Tries to Sell Tradelines to Your Clients

Over the past several years there has been a rise in companies trying to sell “seasoned tradelines” that report on credit reports. These tradelines are authorized user accounts that are purchased from an undisclosed account holder to report on your clients credit.

Simply put…this is fraud.

The Federal Trade Commission has sent tradeline vendors to prison for the use of these accounts. It may seem like a quick option to improve your credit, but it is not legal and should be avoided at all costs.

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#3: Offers a “Credit Sweep”

The first thing to understand is that the terminology “Credit Sweep” isn’t clearly defined. The quickest way to define the term is that a Credit Sweep uses fraud alerts and protection to remove accounts that are not actually fraud. To follow the logical conclusion, committing fraud by using fraud systems is bad. If you find yourself in a conversation talking about a Credit Sweep, it’s best to just walk away. There are no “quick fixes” for credit, especially if an account is legal and reporting accurately.

#2: Try to Sell Your Clients a New Social Security Number

There are 2 types of Social Security Number frauds. A “Synthetic Social Security Number” and using a “CPN“.

CPNs are “technically” legal forms of social security number protection for public figures, but using it to escape the responsibility of debts on your credit report is fraud.

Synthetic Social Security Numbers are filing credit applications for social security numbers that are not in existence. Over time, when enough data is collected on these numbers, they report tradelines and information that has been submitted. This is lying to the credit bureaus and is illegal as well.

And Now for #1…Drum Roll Please! 

#1: Guarantee Results

The number 1 Reasons to Not Use a Credit Repair Company is that they guarantee results. This is the hardest part of trusting a credit repair company. You want results for your clients, and having them pay for services is hard when there is no guarantee. The truth is that no one can guarantee the removal of a specific account or guarantee a credit score. There are two reasons for this that once you understand, will make a lot of sense.

You Can’t Guarantee What You Don’t Control

Data on a credit report is submitted by the consumers creditors. They send your personal data and information about the tradeline you have with them. The information on your credit report is from a third party company and unfortunately if they choose to not change the account, no credit repair company can change their mind. To guarantee results on something that you don’t control is a lie.

It’s Not Inaccurate or Unverifiable

Derogatory items get removed when they are inaccurate or unverifiable. If the dispute process shows the account is reporting accurately and they can verify the ownership of the account then it legally has the right to report on your credit. The only solution for removing accounts that are accurate and verifiable is to wait for 7 to 10 years until the account is no longer allowed to report.

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