Sit Back. Relax. Let Us Get YOU Sued.
Posted on November 7th, 2007 by Marc Chase Posted in Credit Repair | 13 Comments
“Send us your credit reports. Tell us which items to dispute. Sit back, relax and let us work on your credit.”
Read just about any credit repair company’s website and you might notice their dispute process sounds something like that. I see the appeal; and to a consumer who doesn’t know the ins and outs of credit repair might think a simple process is best.
After all, they’re the experts. Let them do their jobs right?
What if I told you that this simple little process is the surest way of getting yourself sued? It is. I guarantee it. Keeping reading and I’ll prove it.
First, I have a hunch this may end up being a long post. I apologize in advance.
To understand why this generic method of disputing negative items on your credit report is dangerous - very dangerous, you have to have a basic understanding of how the system works.
Collection agencies often times buy really big “baskets” of debts from creditors and they do so for pennies on the dollar.
For example: A collector buddy of mine says they can buy hundreds of thousands worth of “dead accounts” from a cell phone company for sometimes as little as $10,000.00 and from there, it’s simply a numbers game.
With those kinds of numbers there’s a ton of profit if they work smart. But they’re called dead accounts for a reason. They’re old. They’ve already been beat up by the original creditor, and their credit is probably already destroyed.
The collector, if he wants to make the best of his investment can’t spend too much time on an account if it doesn’t pay off rather quickly. Some of the things they look at when deciding how long to spend on an account are:
- Dollar amount.
- Age of debt.
- Does the debtor have assets?
- Statute of limitations.
- And a lot of gut instinct.
With that many accounts to call, and the statute of limitations close to expiring, they typically won’t spend too much time on a particular client if they don’t think it will pay off.
Unless of course you poke them with a sharp stick (or dispute letter)!
Ok, here we go. So they bought your $1500.00 sprint bill. It’s only a couple months away from the statute of limitations and they’ve tried calling you a few times. They got nowhere with you and decided to shuffle you to the back of the list for a shot at somebody else they think they have a better chance of collecting on.
You’re probably safe at that point.
If it’s at this stage of the game, the account is probably not hurting your credit score that much, and there’s a good chance you just got “lost in the shuffle”.
That’s exactly where you want to be! Let sleeping dogs lie!
Now, what do you suppose happens when you (or the so called credit repair expert you hired) poke that sleeping dog with a sharp stick by sending a letter of validation, or dispute letter?
Here, listen real closely and you can hear the collector reading your dispute letter.
“Ok ass**** I was going to let this one slide. Since you’re going to make me work and validate this thing. I’m going to make you pay. Oh Legal Department, can you take this guy to small claims?”
We all want convenience. We all want easy. Not in this business. Hard work, strategy and a methodical, well thought out plan is what you need.
If a credit repair company simply says “tell us what to dispute”. You better think twice.
If your sign up and interview process (if any) doesn’t sound well thought out and tailored to your personal circumstances, you may want to think about what you’re doing. If you don’t, you may end up in worse shape then when you started.
Excellent article Mark.
Learning a lot from your blog and appreciate the time you take to help people out.
You’re very welcome, glad we could help
It is pretty good advice you’ve been providing. Thank you as well.
I do have a question though. It seems, these companies have no formal training, or experience. Do you foresee any type of “best practices” or licensing requirements in the near future?
Thank you
Very good pointer and I know this to be true because it happened to me.
Sad part is, I did it myself…ooops
Good advice you have given there. appreciate it very much
You’re welcome
Wow, quite interesting, did not know that something is possible. I think I have to read more about that stuff. Thank you for making me aware of that problem.
Thanks for the great post. By the way loved the title.
Wow - I did a search for credit repair and most of them do say that.
Thanks for the tip
This is good advice. A third party can muck things up as much as they want, as _they_ won’t have to suffer the consequences.
Very interesting. I’m doing research on credit repair, and I did have some sort of itch saying “why dispute items that are a couple years old and nobody has called you on it?” Now I know that it can actually be quite dangerous to point it out!
The ancient Greeks had a great word for this: hubris. Shout to the gods and make yourself known, and they’ll realize you exist and strike you with a thunder bolt!
I have to agree. If you live in some states like Texas, the statue of limitations are short so I think after 4 years you can dispute whatever you want. But until then, beware.
You’re right Jeremy..thanks for the input BTW
Just checked out your site…nice job!