Credit Repair is a valuable service. You can try to do it alone, but so far, I’m pleased to have companies do it for me. I have worked with 4 companies in the past and am writing this article as I work with a 4th. There are 2 companies I have my eye on and I have looked at a few others.
Before going into more detail on that, we must be clear: what are you repairing your credit for? The number 1 reason we focus on here at MMM is funding: we are all about a good looking personal credit profile in order to attract unsecured funds based on credit score and stated income. But of course there are other reasons to improve credit, such as a house/car purchase.
But this article will be limited to personal credit repair for the purpose of attracting loans/credit cards.
OK, now, in the past I have worked with
- Credit Nerds (they have changed)
- Approved Credit Score
- Debbie Berg of 123RemoveFast.com (not recommended)
As I write this article, I am working with Ed Lachowicz, who does funding as well as credit repair. In fact it was the great difference in speed of inquiry removal between Ed and my previous credit repair services that spurred me to rewrite my old article on choosing a credit repair company.
Companies I am contemplating working with
I’ve had my eyes on Steven Wilson and The Credit Repair Shop for a LONG time. It seems I always end up not working with them, but isnt because of their quality, because they constantly put out informative content on their YouTube channel. And because of their alliance with Brilliance in Commerce, I’m evaluating Anthony Galaas’ ACE Credit Restoration.
Related Topics We Will Not Discuss
Credit sweeps are a dream come true – instead of simply removing negative items, they get large amounts of debt out of your name and then buy new primary tradelines to beef you up once again. I do know of someone who does this, but I won’t discuss that here.
Let’s Get Down to the Business of Credit Repair
So your credit is busted and you think you have to wait 2-5 or more years before you don’t look like the complete wreck that I look like today:
So the process of credit repair can be summed up on one line: 5 factors affect your score… get those factors improved and your score improves. Of course it isn’t that simple because there are different scoring models. Because our focus is on unsecured funds (as opposed to mortgage funding), we will focus on the FICO 8 and Vantage 3.0 scoring models. So here is a breakdown of how your score is calculated:
- if you’re late on payments, that affects Payment History. I can vouch for it affecting payment history… i was only late on 2 and my score has plummeted. To top it off, CreditRepairCo.net cannot remove late payment report on open accounts. I hope Ed can.
- if you are using more than 30% of your revolving debt (credit cards) then Credit Utilization starts to look poor
- if you dont have aged accounts, then Credit History looks poor
- if you just got a lot of credit (or are showing lots of inquiries?) then “New Credit” will be affected
- Finally, you need to have a mix of credit sources. 3 credit cards minimum that you use monthly, perhaps a house/car payment.
Powers and superpowers in fixing credit
This article was so-titled because there are many ways to skin the cat of improving your credit. Let’s go through the 5 factors and see what options are available (and which companies offer them… and how fast they can get it done and for what cost!!)
How to fix payment history (Factor 1)???
Slow 30-day and Slow-60 items on your credit repair hurt bad… I know personally. And even a great credit repair company like CreditRepairCo.net cannot remove these items if the account is open.
In this category we also have to include derogatory items: collections, tax liens, bankruptcies and judgements.
How to fix Revolving Credit Utilization (Factor 2)?
This is a biggie and there are many options available here for a credit repair wizard. A weak credit repair outfit only knows one thing: pay down the balance. But let’s look at some superpowers to fix credit utilization.
Gap funding (aka Bridge Funding)
A good credit repair resource can put you in touch with someone who will pay down your balances in return for a quick kickback on funding. In my case, I needed to borrow about 13,000 dollar to bring my credit utilization to 35% to qualify for funding via Fund & Grow and my trusted bridge loan source gladly obliged, eager to clock a quick 10% ROI on the loan!
Increase available credit via the eager payback technique
Credit cards like it when you take a long time to pay back because they get more interest. When you max out a card and pay it back several times quickly, the bank does one of two things: they freak out and close the account or they raise your credit limit so you spend more than you can pay back quickly.
Move the debt “elsewhere”
If you have large amounts of revolving debt on your personal credit profile, then you can move the debt to corporate credit cards obtained through one of our business funding methods or perhaps a relative will hold the balance for you long enough to get funded?
Depending on how the underwriters look at your credit file, Authorized Users (AUs) may help. If they only look at overall credit utilization not per-card-utilization, then adding AUs can help.
Get the high-usage card deleted (you read that right)
We will discuss Debt Validation later, but suffice to say that most unsecured debt is actually fraudulent and when the pretender lender is challenged to validate the debt, they will often simply close the account… on the other hand, banks have a lot of money to throw court cases and lawsuits at you. They know they are bluffing. They know that banks do NOT lend money, EVER, even though it appears that way to average person. And they know that they will lose in the end. But they do hope to scare you or break your back with all the work involved in getting them to show their hand.
And course, you can be sure you won’t ever get funding from that particular pretender-lender once you go after them.
Just to be complete, I will mention that debt discharge via your Treasury Direct account is possible. It takes time and the right people doing it, but it does work.
How to fix Credit History/Age (Factor 3)?
How do you show seasoned credit history if you don’t have credit…. kind of a chicken-egg thing here right? Well, have no fear, a super-power credit repair company can add primary tradelines to your credit profile. In other words, these aged accounts look as if you acquired and own them. They typically cost 10% of the amount of available credit on them. For instance, if you want a $10,000 primary tradeline added, you typically pay $1,000. Authorized Users may also help here.
How to fix New Credit (Factor 4)?
New credit is where hard inquiries factor in – if a lender pulls your credit and sees that you have applied at many places recently, they become apprehensive about lending to you, because they fear that you may get several loans in addition to theirs. Also, there is a saying:
Banks like to lend money to people who look like they don’t need money.
So the more hard inquiries you have, the more desperate you look.
The other way that new credit affects you has less to do with the actual score and more to do with underwriters. Recently, even with a 700+ FICO, I was denied credit at Fundwise because the underwriters noticed that I had numerous previous installment loans under 1 year old. Luckily, Fund and Grow was able to get me 30k in credit cards even when Fundwise could not… and I would have had 2 more if Citi and Chase were still holding a bk against me that occured over 20 years ago!
How to fix Credit Mix (Factor 5)?
I dont know
Icing on the Cake
Debt Validation is often used in credit repair as a fast and easy way to have unsecured debt vanish from your credit profile. It works by having the lender validate that the debt you owe them is in fact valid. If the lender cannot validate the debt, they often simply discharge the account. The only credit repair companies with debt validation in their standard protocol are Steven Williams with The Credit Repair Shop and Jason Hall of RapidRescoreCredit.
As Jason Hall of Rapid Rescore Credit states
Rapid Rescoring is an unscheduled updateto a credit account to raise your credit scores. All credit accounts report on a monthly basis, on a specific day each month. If you’ve missed a reporting date of your credit card balance you’ll have to wait 30 days until the next scheduled reporting date. Our Rapid Rescoring of credit card balances are most popular requests. We can also Rapid Rescore a collection off of your credit report with a “deletion letter” from the collection company. A Rapid Rescore can raise a credit score 80-100+ points depending on the changes we make.– Jason Hall, RapidRescoreCredit.com
I believe in paying money to get things done. I once met a CEO and his way of thinking greatly influenced me: “you find out what you need done and how much revenue it will bring you. Then you pay people to do the various subtasks to get the revenue.”
So if I want to attract 100,000 in funding with a 700 credit score, then I’m more than happy to pay a credit repair company a reasonable fee for their services.
But what if you could have your cake and eat it too?
That’s where Deliver Capital comes in – their credit repair is FREE as long as they get you funding. And they can get personal and corporate funding.
But what is a reasonable pricing structure for credit repair services?
Should there a be a charge for assessment?
Should you be charged per item or a flat monthly/one-time fee?
Should you pay beforehand?
Performance Guarantee / Refund Policy
SavingMyCredit (in business for 15 years), offers a performance guarantee with their per-item service.
This might seem obvious, but it is not. The ability to get response to concerns/issues with your credit file is important.
Ye Olde Grande Summary
In this spreadsheet, I attempt to provide an overview of credit repair companies and how they differ.