In the Spring of 2004, my credit was a mess. I was only 26 years old but I’d built up $40,000 in debt and declared bankruptcy out of fear. Months after the bankruptcy passed, I no longer received calls from creditors… but I wasn’t receiving any more credit card offers either. My credit score had dropped from a respectable 780 down to around 500.
One day I was surfing the net (primitive in those days) and I came across a company called Lexington Law. It was my first encounter with the notion of “credit repair”, and I was immediately suspicious. How were these guys supposed to help me raise my credit score? In order to sign up I need to pay about $40 a month and send these guys, paralegals, all of my personal info including social security number, credit reports, the works. It sounded like a horrible scam that I’d sheepishly end up explaining to my parents once they had milked me for all my money.
But for some reason I said what the heck, and I signed up. I sent them over all my docs and waited. Here was the general idea. Basically, the Fair Credit & Reporting Act was passed in 1996. And it gives any US Citizens the right to contest the accuracy of anything on your credit report. The credit bureaus have 30 days to verify the info or else, by law, they have to delete the items.
I learned a lot during that time. I learned that dealing with creditors in general was a waste of time, because the creditors don’t control the credit reports. Even if you pay off your debt there is no guarantee they will erase the debt. No it’s these three credit bureaus… Experian, Equifax, and Trans Union, that hold millions of people’s fate in their hands. They are the big kingpins.
I basically got an online account with a laundry list of all the horrible black marks on my credit. Bankruptcy, Bank of America default for $10,000, Chase default for $8,000, and so on. My job was to pick the ones that I wanted to “question the validitity” of. This was a very “legal” term. You’re not lying exactly, you are just forcing the credit bureau to verify their information.
The Credit Repair company’s job was to draft letters on my behalf contesting the information. I’d heard of people trying to do this on their own, and getting no response at all. But being repped by a big firm, I always received a response. At first, the bureaus would send me letters warning me that someone was probably messing with my account, and that I should call them to verify (a stall tactic).
To my incredible surprise, one day in July I received a letter from Equifax informing me that my Bank of America debt item had been deleted. I went online and looked at my credit report and, sure enough, it was gone! I was stunned. Over the next 6 months 11 more items were deleted off my report. We even got the bankruptcy off 2 of the 3 bureaus.
By 2005 my credit score was back up around 680. And I was able to get reasoable credit card offers for decent APRs. It was fantastic. And I felt empowered enough to share this option with other people.
A couple of things you should know when considering a credit repair company:
1. This kind of legal disputing process takes time. If anyone promises you fast results without explaining how they will get them, be careful! There are a lot of scams out there.
2. Research the heck out of the company you will work with. Check the Better Business Bureau and Google them to make sure they are not scamming you.
3. Understanding that disputes do not always work for every item; in my case, Experian was very hard to get anything deleted off of. If the bureau verifies the information it will stay on the report.
However, even if you can get 3 out of 5 items deleted, it can make a huge difference on your score and in your life. It’s important to know you have options and are not at the complete mercy of the banks. If you are looking for a way to bring up your credit score and start fresh, then credit repair through a competent dispute process is definitely someting to investigate.
Seth Jared writes about financial issues for young adults. He runs blogs about film schools and credit cards for college students.
