Credit Repair Company
How do Credit Repair Companies work? Do they
really help your Credit Score?
Like anything else, I took a few measures to
protect my hard-earned money and myself. I already have bad credit,
which means I have to guard my cash.
A first thing first, how
bad is my credit and how can I independently monitor the progress by
the so-called credit repair companies. I first pulled my credit
report free as is allowed by the federal government so your first
step it so
See your credit score on FreeCreditReport.com
free
of charge. Ouch, a 430 credit score no wonder I was getting those
awesome 29.99% interest credit card offers in the mail.
Ok so next I did some research and found many
credit repair companies A-to-Z from different parts of the county.
Some have attorney’s others have “insiders”; others even claim they
have friends at the Credit Bureaus. Well we all know that there are
no leprechauns and that money does not grow on trees so we can
eliminate the companies that are promising you the moon.
The company that jumped out at my was Lexington Law Firm. This company
presented facts and actually had an educational page. This is odd
the other companies never wanted to let customers know how they were
going to handle your case, or improve your credit score; they also
didn’t tell you how the credit bureaus work. Hummm lets check them
out.
Here is what I found, or my interpretation of
their educational webpage
When you owe a bank like Chase or MBNA they charge of your debt as a bad debt, they get a tax break at the end of the year from the IRS for having a loss. Then they sell your account to a debt collector for pennies on the dollar. I have heard that they sell your account for as little as 10 cents to a dollar. This means that if you originally owe $1,000 to MBNA they might have sold your account to a Debt Collector for about $100.00, but the Debt Collector is going to try to harass you and embarrass you, perhaps even threaten you to collect the full amount. This is why if you wait long enough you can "settle for with them for significantly less than what you originally owed them. You start to receive Settlement Offers in the mail from them, but if they can’t prove that it’s your debt then don't pay them, because it could be someone else with your same name.
Pretty Cool stuff, Now I know what the letters of validation are used for they challenge the credit bureaus to prove that it was you who opened the account. Nowadays we use computers to “electronically sign” our applications, how can they prove it was you? Simple they cant!
Well with this info, I decided to put my money
where my research ended. I signed up for Lexington Law Firm
's Regular
service that costs $39 bucks a month and a one-time fee of $99 to
set up your account with a paralegal. Hummmm $138 initial
investment. The other companies were asking for $250 a month and the
once who had “friends” wanted $2250.00 for their package.
