Archive for the ‘Credit Repair’ Category

How credit repair works

Tuesday, August 23rd, 2011

Credit bureaus insist that individuals cannot repair their credit without waiting years for negatives items to be removed. Don’t believe them. Credit Report errors are at an all time high and these inaccuracies are most likely affecting your score in a big way. Here are the four essential steps that make up the process of cleaning up your credit reports. These steps are repeated until you are satisfied with the results or cancel our services.

We examine your credit reports
You begin by forwarding copies of your credit reports to us from all three of the major credit bureaus. If you do not have copies of your credit reports, you can get copies at http://www.ficoscoreonline.com. Simply supply us with your username and password and we can login and download them without hassle.

You tell us which items to dispute
By either letting us know over the phone, writing on your credit report, or filling out the online interviewer, you inform us of what needs to be disputed.

HTDI Financial works your case
HTDI Financial begins to dispute your items by using its arsenal of credit report repair strategies and experienced staff to challenge negative items directly with the credit bureaus. This process will continue, with each new round to the bureaus having to address a smaller number of inaccurate, unverifiable and incomplete negative information each time.

Sit back and wait for results
The credit bureaus have a reasonable amount of time (roughly 30-50 days) to investigate your dispute. Of course with mail time, we figure 45-60 days from the time we draft letters to when you will have most or all the responses in the mail and forwarded to us. Within that time they must provide proof of the discrepancies on your report or be forced to delete those negative items. They will send you an updated credit report and you will then send it to us to move your case forward. The cycle begins again, and we remove more negative items from your reports…

Problems with the online dispute system

Tuesday, August 23rd, 2011

When the FCRA was revised by FACTA, they put in a section for “Expedited Dispute Resolution” Section 611a(8) aka the on-line dispute system. If you read that part you will notice this sentence:

“the agency shall not be required to comply with paragraphs (2), (6), and (7) with respect to that dispute” if they delete the tradeline within 3 days.”

  • Paragraph 2 is the part that requires the CRA to forward your dispute and all related documentation you provide to the creditor.
  • Paragraph 6 is the part that requires the CRA to provide you with written results of the investigation.
  • Paragraph 7 is the part that requires the CRA to provide you with the method of verification on request from the consumer.

The law isn’t specific enough to say permanently delete or suppress … herein lies the problem. The CRA can “soft delete” it for 30 days and then the tradeline can reappear when the furnisher reports it again in the next 30 day cycle. This is due to the fact that the CRA’s aren’t required to tell the creditor you disputed it at all.
This leaves a system in place where the consumer thinks they are getting a delete, but it is only temporary. Since the creditor doesn’t know it was deleted, they will re-report it and the CRA will put it back on your report. Furthermore, you lose the hard-copy of the investigation results you would otherwise get if the dispute was done by mail by a reputable credit repair company. This leaves all evidence of the dispute with the CRA’s …where you are assured that they will fight any and all attempts in court.

The Credit Bureaus Defense Strategy of Attrition and Delay

Tuesday, August 23rd, 2011

The “Big Three” (CRA’s) defense strategy was criticized by Judge Posner of the 7th Circuit in the bedbug case as “investing in developing a reputation intended to deter plaintiffs”, which was an important reason why in that case the 7th Circuit upheld $372,000 in punitive damages with only $10,000 in punitive damages (a 37-to-1 ratio).

Consumers need to urge the courts to follow Judge Posner in deliberately recognizing that that is a game played by the CRAs [and most of their furnishers], and that an appropriate outcome of that game will be high punitive damages.

Here is the actual passage from the decision (which is Mathias v. Accor Economy Lodging, Inc., 347 F.3d 672 (7th Cir. 2003), at p. 677:

Finally, if the total stakes in the case were capped at $50,000 (2 x [$5,000 + $20,000]), the plaintiffs might well have had difficulty financing this lawsuit. It is here that the defendant’s aggregate net worth of $1.6 billion becomes relevant. A defendant’s wealth is not a sufficient basis for awarding punitive damages. State Farm Mutual Automobile Ins. Co. v. Campbell, supra, 123 S.Ct. at 1525; BMW of North America, Inc. v. Gore, supra, 517 U.S. at 591, 116 S.Ct. 1589 (concurring opinion); Zazu Designs
v. L’Oreal, S.A., 979 F.2d 499, 508-09 (7th Cir.1992).”

That would be biased and would infringe upon the rule of law by making the punishment depend on class rather than behavior. This is where wealth enables the credit bureaus to mount an extremely aggressive and expensive defense against suits. In turn, this may make it difficult for the consumer to find a lawyer willing to handle their case, involving as it does only modest stakes, for the usual 33-40 percent contingency fee.

In other words, the credit bureaus are investing time and money to develop a

How Do You Restore Bad Credit? How Long Does It Take?

Tuesday, August 23rd, 2011

How do you restore bad credit?

A disputed credit listing must be verified as accurate for it to remain on the credit report. If the credit listings contains an error, the credit bureau may simply correct the item, but, very often, disputed credit items cannot be verified because either the creditor either no longer possesses necessary information or does not to go to the effort of verifying it. Furthermore, the investigation must be completed within 30 days or the listing must be removed. For these reasons, properly disputed credit listings are removed from your credit report with remarkable frequency.

At the conclusion of the credit bureau’s investigation, a new copy of the credit report is sent to you along with any deletions or improvements. You then mail us the results and we update your file. The cycle repeats itself at strategic intervals.

How long does it take?

Everyone wants you to see results immediately. Although everyone’s credit history is different, everyone will see responses from the bureaus within the first 45 days. Every month after that your credit picture improves. Credit repair is not an overnight fix, however significant changes can be seen as early as just a couple of months. However a majority cleanup may take between 6-12 months.

The Truth About Credit Repair Companies

Tuesday, August 23rd, 2011

What is true about credit repair companies?

Can they really do what they say they can do? Many “credit repair” companies claim to remove negative credit with the flick of a wrist. Their advertisements make bold assertions and money back guarantees; “Bankruptcy, tax liens, judgments, . . . no problem!! One hundred percent guaranteed!! Credit report 100% cleared in 30 days!!” Can they really make such sweeping guarantees?

While some credit repair companies are outright frauds, others are not frauds and they use the dispute process to obtain impressive results. In fact, they delete thousands of negative credit listings every day.

Unfortunately, it’s risky to trust anyone to help you repair your credit. The majority of credit repair companies were started by entrepreneurs with a penchant for marketing. Consumers have flocked to these “credit doctors” only to discover that their advertisements proved far more impressive than their results. Hiring a credit repair company is like playing Russian roulette as in most cases “you get what you pay for” and once you have a lesser experienced company hack away at your credit file, it’s almost near to impossible for a good company to help you at all.

Working within the credit bureau maze requires substantial background knowledge; knowledge it takes credit repair companies years to learn. In fact, U.S. District Court Judge J. Wexler entered the following legal opinion in the Federal Supplement. “Since allowing third parties to assist consumers will likely lead to the expedited correction of credit reports, it will further the purposes of the [Fair Credit Reporting] Acts.”

Top Ten Myths About Credit Repair

Tuesday, August 23rd, 2011

On the surface, using these services seem to make so much sense you would assume everyone in the mortgage originating industry would be using these services. So the question is, why not?

First let’s outline the top 10 reasons loan officers give for not using these services and then let’s examine them in greater detail.

•1) Credit repair doesn’t work!

•2) Credit repair makes a clients credit worse.

•3) When negative items are removed they come right back on.

•4) Removing old negative items does not improve score that much.

•5) I repair client’s credit myself.

•6) It costs too much, my clients can’t afford it.

•7) Almost everyone I work with has great credit.

•8) I don’t trust people in the credit repair industry.

•9) The process takes too long and is a waste of time.

•10) Unless I can do the loan this month, I really don’t care.

Credit repair doesn’t work!

OK, so here is the bottom line, it does work! When you go on the internet and do a search on credit repair you will see links to a number of websites providing information on credit repair. If you have gone to these websites you know there are a couple of things repeated over and over again. The first is that accurate information cannot be removed from your credit report. Moreover, do not let anyone tell you that it can be. Secondly, there is nothing a credit repair company can do for you that you cannot do for yourself.

What you may not know is that these web sites are created or financed by the credit bureaus. So why are they spending money on these websites? The credit bureaus make money each time credit information is pulled. People with low scores or damaged credit have their credit pulled dramatically more often than those with good credit. Credit bureaus are fundamentally opposed to credit repair companies for one simple reason, it costs them money!

The credit bureaus hate us and our clients love us. We do not dispute that the client has these trade lines; we simply take the creditors and credit bureaus to produce the information that they must have to verify the debt. More specifically, they must prove that everything is exactly accurate. If they do not have the documentation or something is being reported incorrectly, by law they must remove it!

Knowing the specifics of the ever-changing laws is crucial. Now if the consumer knows the ins and outs of the laws as well as we do and has years of experience doing this work day in and day out they could possibly get the same results. They can also represent themselves in a court of law, do their own taxes, and sell their own homes. But they hire attorneys, accountants, and realtors everyday to get the job done most effectively and as fast as possible.

Credit repair can make a clients credit worse.

This is a common misconception. People often mistake credit repair for consumer credit counseling service. Nothing can be further from the reality. Consumer credit counseling almost always shows as negative on a consumer’s credit and credit score and should not be mistaken as credit repair done by a reputable credit repair company.

When a credit counseling agency sets up a 12-36 month payment arrangement between a consumer and a creditor they are actually setting up 12-36 months of late payment history for the consumer. Even if the client makes the payments arranged by the consumer credit counseling service on time, those payments are reported to the credit bureaus as late payments.

Our primary focus is credit score improvement. This is done by removing negative items on the client’s credit report as well as educating the client on how to use credit to positively affect the credit score. The value of our advice can last a lifetime.


When negative items are removed they come right back on.

After we have removed negative items from a credit report it is always possible that the original creditor can re-report the negative item. However, this is rarely the case. Given that the original creditor generally will only hold the debt for 4-6 months, they do not waste time or the money to check on these items and re-report them. What typically happens is that the debt is sold or transferred to a collection agency which will re-report them in an effort to pressure the client to pay the debt. When this occurs we can go back and dispute the items under the same dispute that removed them in the first place.

Removing old negative items does not improve the score that much.

This is another common misconception that is totally untrue. While it is true that negative information is weighted meaning the older it is the less negative impact it will have on the credit score. Common sense should tell us, the very fact that this information remains on the credit report for 7-10 years means it is affecting the score in a negative way until it is removed from the credit report.

I repair my client’s credit myself.

Consider this, as a loan officer you are paid to originate loans. A simple business concept called leverage dictates that the way to make the most money is to spend your time doing the things that generate the most income for your business. For you that means meeting with clients and taking applications. Show me a loan officer who processes their own loans and I’ll show you a loan officer who does very few loans. Focus on the things that pay you the most money for the time you spend doing them and delegate the other tasks to people who are proficient at those things. How many times have you spent hours trying to repair someone’s credit only to be unsuccessful or to have them go somewhere else to get the loan?

It costs too much, my clients cannot afford it.

Given the tremendous impact credit score has on a person’s overall financial life, the question really should be, how can your client afford not to contract with us? Credit affects your client’s mortgage payments, car payments, credit card payments, as well as auto and homeowners insurance, and the list goes on. If we improve your clients score 50-100 points how much can you lower their monthly mortgage payment?

Generally speaking, however much you are able to lower the mortgage payments we can assist the client in lowering the cost of their monthly obligations by an equal amount. So, if you lower the mortgage payments by $250 per month we can probably lower the other bills by $250 a month for a total of $500 a month. This is $6000 every year because of credit!

Almost everyone I work with has great credit.

A few years ago I would have looked upon this as a legitimate objection; today this statement is simply disingenuous. The reality is, if you have been in the mortgage business for 10 years or more you are seeing more bad credit reports than you probably ever have. With the coming changes in the bankruptcy laws this trend will only increase. Currently over 79% of people in the market for loans are candidates for sub-prime mortgage products.

We can fix these broken people for you while you are doing other more productive things. When they are fixed you will be one of the first to know by our auto-matic notification systems. You now have a client who thinks you walk on water as well as have another transaction that otherwise may have been a “no deal.”

I don’t trust people in the credit repair industry.

Every industry has people who do not operate in the most professional manner. In addition, a lot of the negative stigma in the credit industry about credit repair companies is hyped up by none other than the credit bureaus themselves. Think about it for a minute, if a consumer dispute by a consumer or a credit repair company is going to add overhead to the credit bureaus operations and if the dispute process is successful, then the consumer will not be applying for credit as often because they do not need it as much, with this reducing the credit reports sold by the credit bureaus, is it any wonder that the credit bureaus would create bad press about credit repair companies.

The process takes too long and is a waste of time.

There are many credit repair companies who only work on 1-3 negative trade lines at a time, one bureau at a time, until they are removed. If the client has 20-40 negative trade lines which is not uncommon, this could take 2-3 years. Given this, we understand why you might feel the process takes too long. The best credit repair service will go against all three credit bureaus and an unlimited number of negative items at no extra cost to the client.

Unless I can write the loan this month, I really don’t care.

Generally, people who make this statement will not be in the business very long. That being said, we do understand why loan officers feel this way. The constant pressure to produce can be unbearable. So let us address this question with honesty.

The reality is, in certain situations we may be able to bring the score up in 30-45 days to get a loan done. Bear in mind if it can be done we are uniquely qualified to get it done. The goal of service is to increase the scores 50-100 points in 90-120 days. This may allow you to do a band-aid loan today and guarantee a second transaction in the future. In addition, the long term loyalty this can create between you and your client will keep them coming back for life and referring you to all their friends, family, co-workers, etc …

Online Dispute System

Tuesday, August 23rd, 2011

When the FCRA was revised by FACTA, they put in a section for “Expedited Dispute Resolution” Section 611a(8) aka the on-line dispute system. If you read that part you will notice this sentence:

“the agency shall not be required to comply with paragraphs (2), (6), and (7) with respect to that dispute” if they delete the tradeline within 3 days.”

  • Paragraph 2 is the part that requires the CRA to forward your dispute and all related documentation you provide to the creditor.
  • Paragraph 6 is the part that requires the CRA to provide you with written results of the investigation.
  • Paragraph 7 is the part that requires the CRA to provide you with the method of verification on request from the consumer.

The law isn’t specific enough to say permanently delete or suppress … herein lies the problem. The CRA can “soft delete” it for 30 days and then the tradeline can reappear when the furnisher reports it again in the next 30 day cycle. This is due to the fact that the CRA’s aren’t required to tell the creditor you disputed it at all.
This leaves a system in place where the consumer thinks they are getting a delete, but it is only temporary. Since the creditor doesn’t know it was deleted, they will re-report it and the CRA will put it back on your report. Furthermore, you lose the hard-copy of the investigation results you would otherwise get if the dispute was done by mail by a reputable credit repair company. This leaves all evidence of the dispute with the CRA’s …where you are assured that they will fight any and all attempts any court action.

How much money you save? Mortgages

Monday, August 22nd, 2011

Figures reflect national average rates for $165,000, 30-year fixed mortgage.

Credit score– Interest rate–Monthly payment–Savings with higher score*

760-850 —– 6.274% —— $1,019 ———— $0
700-759 —– 6.496% —— $1,042 ———— $8,627
660-699 —– 6.780% —— $1,073 ———— $19,788
620-659 —– 7.590% —— $1,164 ———— $52,336
580-619 —– 8.905% —— $1,316 ———— $107,234
500-579 —– 9.899% —— $1,436 ———— $150,192

* The amount one could save over the life of the loan if credit score was 760 or higher.

Diversification!

Monday, August 22nd, 2011

Off the topic of Direct Marketing I have been thinking of alternate ways for LOs to make money while you grind this thing out. You don’t even have to change much about what you do EXCEPT WORK A LITTLE HARDER for your potential borrowers and TURN DOWNS!!!

Think about this for a second……We are all taking more applications now than we have in the last couple years but for most it’s the qualifying the prospects that is the issue. I talk to so many Loan Officers and Brokers a like that just throw that stuff away…….WHY WOULD YOU DO THAT? Your trash is another man’s treasure and actually its a treasure to you but most just don’t know it yet.

Here is what I would be doing if I was a full time LO….

Do which ever marketing I like best and then really really WORK THE LEADS! Work the potential Refi to the bone until there is absolutely no deal there. On all the turn down leads we have all got to start helping these people. There are other ways that may require any Loan Officer to get out and network to help the homeowners in other financial ways….

I would try building relationships with other professionals in other lines of finacial services….

First- credit repair companies–I know most of them pay you a commission for the repair job and then they send you the borrower back for the loan after things are fixed. You not only go the extra mile for your client but you also make a little money on the side form the CR company.  This helps you help a client that needs it and that gives you the chance to put them in your client base for later as well as earn referrals through them.

Another example would be to learn loan modification. 9 out of 10 applications taken DO NOT qualify for a loan, so in my mind you should try and modify their loan with their current lender and make a small commission for HELPING your client. Again this was a turn down before and it could be turned into revenue and maybe even a future deal and more than likely a referral or two for another modification. (you would not believe how much home owners talk about not being able to refinance with each other) If you go the extra mile on either of these two ways or even debt settlement or something like that you will be helping home owners the same way, FINANCIALLY, and still be making money as well as building your client base for future.  Some of these companies are set up differently so finding the right one for you can be difficult.  I have done extensive research on this and if you would like information you can email me off the board for the names of the companies I would suggest using.

Sorry to go off on a rant but i see so many people complain about turn downs and lenders not lending to hardly anyone, but really they should be trying to figure out how to try and help these clients out. There is a lot of money to be made rehabbing or modifying loans as well as credit repair and settlement. START DIVERSIFYING IF YOU WANT TO LIVE AS WELL AS YOU MIGHT HAVE IN YEARS PAST IN THE INDUSTRY!  Especially considering some of the people you all run into can’t even modify because they are too far upside down.  Another GREAT way to build Realtor referrals for short sales.  You simply can’t loose if you build yourself a network of industry professionals to send your turn down and bail out deals to.  Net working has never been easier with over 95% of all home owners in need of some sort of financial service.  You area already taking the time to talk to them to find out about the refi…if you turn over just half your turn downs you not only cover part of your over head but you also build your clients for later.  We know lenders will lend again at some point.  he who has the biggest over all client base will be the one who makes the most money when this happens.

I’m in hopes this message gets at least one person motivated again, all the negativity does get overwhelming after a while and there truly is a ton of money to still me made in financial services. Lets get on it!

Hiring a credit repair company

Saturday, May 10th, 2008

The time has come for you to either hire or recommend a credit repair company.

Who do you choose?
If you do a simple internet search for credit repair you’ll see tens of thousand of companies. What does one do that the other can’t, or even that you can’t do for yourself. I’m sure you’ve heard the same regurgitated response, “you can repair your credit yourself.” You can build your own plane too, but would you really want to fly in it? Do you do your own taxes, or do you hire a professional? Do you represent yourself in court, or do you hire a lawyer?

I literally laugh out loud at those who say, “I have a credit repair letter.” They must be delusional if they think that using the same letter, in the same format, stating the same thing over and over hasn’t been caught by the credit bureaus. Or mortgage brokers who say, “I repair my clients credit all the time,” “no you don’t, please stop fibbing,” is my reply. If they receive the same level of results that we here at HTDI Financial do, they should leave their current profession and start a credit repair company themselves. Incidentally, if this is the case, I can help you out there as well.

Consider this … It is illegal for a credit repair company to guarantee results!!! ILLEGAL!!! We can not guarantee the removal of any one specific item, that would be like a lawyer guaranteeing a verdict of “not guilty.” So how do you gauge the caliber of a credit repair company if they are adhering to the law? That’s easy … statistics. What is their average deletion rate? Do they limit their disputed tradelines and the bureaus they go against? I have scoured the internet for average deletion rates and we are by far the leaders of the pack. We are so good that we actually have other credit repair companies outsource their work to us so they can have the same level of success as we do.

  • We go against all three credit bureaus simultaneously and an unlimited number of negative items.

Results as of 01-07-2008 (real time at www.htdifinancial.com)

1st Round 46.50%

2nd Round 20.97%

3rd Round 18.76%

4th Round 14.75%

To achieve the industry leading results in a legal and ethical manner there is no other choice but HTDI Financial.