I would like to know what is an appropriate fee for receiving credit repair services? I know the company is legit but after just a little searching, I feel that their fee is exorbitant. My credit score situation is pretty straightforward. We pulled from the 3 reporting bureaus and my scores are 656, 678, 681. There are numerous 'old and useless' closed accounts on the reports. One inaccuracy (mostly due to a residential move address mixup). There is a tax lien (not released) and that is accurate. I was instructed on how to lower some credit card balances to the 'optimal' percentage. I was told to put a purchase on two cards for more revolving credit and make a purchase elsewhere for installment credit. Again, I do not feel the company is fraudulent but I have no reference for comparing fees. By law, I have 3 days to cancel.
How much fee is too much? What are you locked into in 3 days? What is reported on the company, with say BBB, or ripoffreport.com?
By law, I have 3 days to cancel my agreement with them. The fee is $799 in addition to $89/mo for mailing costs (e.g. certified mailings to creditors)
How long are you locked in to paying monthly fees? What does their BBB report say? How many accounts are you dealing with, and how much outstanding debt, whether charged off, in dispute, or not? How much cash do you have now, and how much are you likely to be able to pay per month, if you chose to just pay off debts? Within what timeframe do you want to improve your financial and credit position? When you make financial choices, they are not in a vaccuum. All rational financial choices are between alternatives, ranked by return on investment, and considering risk. The comparisons must consider the full cost of the choice, and the full risk that the value will be less than promised.
They say that they are registered with the BBB but not a member. According to the BBB: Closed Complaints Number of complaints processed by the BBB in the last 36 months: 2 Number of complaints processed by the BBB in the last 12 months: 2 Regarding the issue of charging in advance, they claim that they are allowed to do this legally because they are registered with the state. They are also bonded. As I mentioned, there is one accurate tax lien, another lien that is inaccurate, one credit account that is innaccurate regarding 2 late payments, and many closed accounts listed that provide no advantage to my credit report. Regarding the accurate judgement (tax lien), three years ago, I started working with a tax attorney to negotiate an Offer in Compromise. Late last year, the offer was rejected and in appeals as well. The IRS put me on "uncollectible" so, the lien stays unless the IRS forgets to renew the statute after 10 years. I am not in a position to pay off this debt. Regarding the innacurate judgement, the report shows it as two liens where one is not released and the other is released. The docket numbers are very similar except and it appears to be a typographical error. So, it's really a released lien but is showing up as two...if that makes sense. There are no charge-offs. Regarding the certified mailing fees, I am allowed to eliminated some by offering client referrals. They feel strongly that the entire process would conclude within 6 months. They offered to eliminate certified mailing. They offer a 100% guarantee if unable to make an improvement in my credit report. However, if the measurement by which this improvement is judged is not in writing, it's meaningless. I told them "I don't feel comfortable with this and won't move forward unless that changes." I had my bank freeze the check. I am willing to pay some compensation for expediting a process that I know will take me much longer. But, how do I know if I can really get the same results they would get and in what time frame? All I have is their sales pitch about their relationships with the big 3 and their knowledge of how things get removed, etc. Thank you for your replies.....
"I know the company is legit but after just a little searching, I feel that their fee is exorbitant." How do you know this? Are they licensed? Maybe they have a local business license, but what does that ensure? Nothing. Are their employees, or managers, licensed, or certified, as financial planners, psychologists, high school graduates, or what? They are probably not even required to have any special license like loan brokers, nor are they likely to be regulated like lenders, so what do you really know? ---------------------------------------------------------- "My credit score situation is pretty straightforward. We pulled from the 3 reporting bureaus and my scores are 656, 678, 681." These are within range of reaching 700 in a reasonable time with a little effort, even on your own. ----------------------------------------------------------- "There are numerous 'old and useless' closed accounts on the reports. One inaccuracy (mostly due to a residential move address mixup)." Old accounts, even if closed, are not old and useless if they are reporting positively. Even if there is a late or 2, if they are old, they may be pulling your scores up. Long credit history counts. Old addresses don't hurt you. You could call the CRAs and remove them tomorrow. ----------------------------------------------------------- "I was instructed on how to lower some credit card balances to the 'optimal' percentage. I was told to put a purchase on two cards for more revolving credit and make a purchase elsewhere for installment credit." Not sure there is an optimal percentage for FICO. Not major magic. "Utilization" is probably driven primarily by total debt to available credit. But avoiding too high of amounts on any one card may make that lender skittish, and drop your limit. I doubt opening installment credit will iniitally affect your FICO positively. It more likely will depress it. It might appear positive after a year of payments, or after being paid off if you have limited accounts reporting. ----------------------------------------------------------- "They say that they are registered with the BBB but not a member. According to the BBB: Closed Complaints Number of complaints processed by the BBB in the last 36 months: 2 Number of complaints processed by the BBB in the last 12 months: 2" "Registered"? They had 2 complaints, and presumably answered a BBB letter. That is all you know. "Closed" could mean anything. Those complaints were in the last year. How long have they been in business? Could be so short complaints have not been made yet. More important, what were the complaints for? How do you know they will do what you think you are paying for? ----------------------------------------------------------- "Regarding the issue of charging in advance, they claim that they are allowed to do this legally because they are registered with the state." Irrelevant. May or may not be legal, but doesn't support their legitimacy and ability to perform, while implying the state holds them to some accepted standard. "Advanced fee loans" are the area where advance payment may run afoul of the law. "They are also bonded." Did you verify this? How do you even know? Why is this significant? Is it a legal requirement? To ensure what? ---------------------------------------------------------- "Regarding the innacurate judgement, the report shows it as two liens where one is not released and the other is released. The docket numbers are very similar except and it appears to be a typographical error. So, it's really a released lien but is showing up as two...if that makes sense." They will probably not be able to fix this for you if your own simple dispute to a CRA has not fixed it. You will probably need to put pressure on the party who released the lien originally to put in writing that it was released, and that the second lien is an error, to then be able to put pressure on the CRAs to remove. Judgements are reported from information collected by companies such as Lexis-Nexus that the CRAs pay to collect it for them. It looks like the data collector made a mistake, but the CRA will often claim it is accurate, or the court told them, even if it is BS. ---------------------------------------------------------- "one credit account that is innaccurate regarding 2 late payments," If you have records showing the late payments are being inaccurately reported, you are in a better position to dispute with the CRA and the DF directly yourself to get this fixed than they are. It may take working your way of the DF's hierarchy chain, or repeated letters, CRRR, to ensure it stays off. ---------------------------------------------------------- "There are no charge-offs." Then just paying your bills and aging your lates will improve things. What is negative? What are you paying for? ---------------------------------------------------------- "Regarding the certified mailing fees, I am allowed to eliminated some by offering client referrals. They feel strongly that the entire process would conclude within 6 months. They offered to eliminate certified mailing." If you are actually dealing with inaccurate reporting, CRRR is essential, or why bother? If it is not in writing, send CRRR, it didn't happen. Not sent certified, and you don't even know they sent it. It's not that expensive. ---------------------------------------------------------- "They offer a 100% guarantee if unable to make an improvement in my credit report. However, if the measurement by which this improvement is judged is not in writing, it's meaningless. " So that is why they say they are "bonded", whatever that means. Have you checked with their alleged bonding company? Promises and guarantees are no better than the good faith and competence of the party making them. If you can't enforce them, they are meaningless. To try to recover $800, you would hire an attorney, right? Hardly. Small claims? Try collecting on your judgement, assuming it is even for your full losses. For these amounts, you would cut your losses and lose your $800. They know that. ---------------------------------------------------------- "I told them "I don't feel comfortable with this and won't move forward unless that changes." I had my bank freeze the check." Clearly you have confidence in them. ---------------------------------------------------------- "I am willing to pay some compensation for expediting a process that I know will take me much longer. But, how do I know if I can really get the same results they would get and in what time frame?" All you really know is what you might pay. Promises are cheap. Cash is real. ----------------------------------------------------------- "All I have is their sales pitch about their relationships with the big 3 and their knowledge of how things get removed, etc." "Relationships with the big 3" from a "credit repair" organization? The CRAs actively discourage CROs even more than they discourage consumer disputes. In fact, they tend to label CRO disputes "frivolous" and ignore them if they can. A red flag! That is out and out BS. ---------------------------------------------------------- You appear to be approaching this from a business perspective. "I need this, they say it will cost this." In business, or whenever you deal with the services of professionals on whose skilled competence you depend, you choose them using referals from other professionals you have learned you can trust, based on experience. I doubt you were referred to these people by your CPA or attorney.
If you cancel within the 3 days, better do it timely, and also send a cancellation letter, CRRR, postmarked within that time, and requesting the return of your check. Otherwise you may find yourself with some CA trying to collect $800 plus several months alleged back payments, or trying to collect on your blocked check as a bounced check. If you cancel by phone alone, it may just not happen. At least if you have your file copy, certified reciept, and green card, you can shut them up. The cheapest time to avoid a problem is before it occurs.
Thanks for taking the time to respond to my statements. If I get the gist of your questions and counter-points correctly, is it safe to say that you are not an advocate of credit repair service companies? If I am misunderstanding, then under what circumstances would you engage with a credit repair service co?
If it really matters, paying someone else to do it is unlikely to get as good of results as doing it yourself. For what you are paying, routine form letters are likely to be ignored as frivolous, and leave you no better off than if you sent them yourself, but with the CRAs already ready to reject later disputes as already verified. If there are factual errors, you are in a better position yourself to both know what they are, obtain agreement with the DF who is reporting it that it should be corrected, force the DF to provide written confirmation, and use that to get the CRA to correct. If it is a seriously damaging error, at some point you look at using an attorney. But unless you intend to litigate every minor error, half your leverage is social and persuasive, and they have little traction in that area compared to doing it yourself. I don't see where a CRO fits, provides value worth what they cost, without risking doing more damage that you later have to correct yourself. Furthermore, I am concerned with what your comments indicate they claim they will do for you. In particular, old accounts, even closed, are not of little value if they are positive TLs. They may be what is keeping your FICO scores as high as they are, and since they are closed, it might be hard to get them reinserted if they were removed. I am also concerned about their claimed good relationship to the "big three". Have they provided you with contact names of who they work with at the CRAs? An attorney who has sued in the past and obtained settlements might indeed have "contacts", but a CRO? It sets off my BS detector.
