The current economic environment has resulted in the emergence of thousands of so called “credit repair” companies that seek to take advantage of the millions of scared consumers with false hopes of restoring their credit rating.

As such, we applaud the Better Business Bureau and Federal Trade Commissions’ proactive campaigns warning consumers of such scams. Our view remains steadfast; that these companies not only fail to provide long-term benefits to their customers, but most times make matters even worse than before. Many times these companies are even breaking the law on their customer’s behalf.

We do feel, however, that the BBB and FTC unknowingly disregard the benefits of organizations like MyCreditGroup that help consumers optimize – and not repair – their credit rating.  This letter outlines the differences in the two types of companies and the benefits of an ethical Credit Optimization firm.

The Problem with Credit Repair Companies
From our experience, these organizations do nothing more than send the same dispute letter over and over to credit bureaus disputing everything negative on a customer’s report. This tactic is nothing more than an attempt to overwhelm the credit bureaus to the point that they fail to verify the validity of the debt; whether the debt is legal or not.

Dozens of ethical and legal problems exist with this tactic, but the primary ones include:

a) Sooner or later, the creditor will usually verify the debt in dispute and reinstate it on the customer’s record, thus providing consumers no long-term benefit.

b) Federal law strictly prohibits disputing debts known to be valid.

c) Depending on local statutes, you could be forcing a creditor to sue you

The Benefits of Credit Optimization Firms
In contrast, Credit Optimization Firms like ours follow a five-step process that provides long-term benefits for consumers in the most ethical, effective and – most important – legal manner.

It’s imperative that you note - that we don’t lie about the validity of any debts, and we don’t “shotgun dispute” everything negative. We simply make sure reports are accurate. In fact, if a consumer says a debt is accurate we will not dispute it on their behalf!

Step One – Identify “inaccurate” debts: First, we review the accuracy and validity of our customers’ outstanding debts with the consumer. Instead of simply disputing everything on a consumer’s report, we look for instances where the creditor is erroneously reporting debts.

The most common error is caused by creditors “re-aging” debts. In short that means creditors renew the date of default in order to get more time to collect. The illegalities of such practices not withstanding, such events can drag down a credit score by as much as 50 points per account.

Given that fact, having the dates adjusted to reflect accurately on a few accounts can be as much as 50 to 100 positive points.

Step Two – Help consumers properly use credit lines: The vast majority of consumers do not know how to properly manage their credit; at least not the way the “system” likes them to. The credit scoring system is set up in such a way that the balances they carry, the number of cards they have and they dates they pay their bills can negatively and significantly impact their credit scores.

For example: paying your bills “on-time” can actually hurt your score.

We teach them how the system likes to see them manage their credit and we work with them towards building a model credit profile.

Third – Negotiate payment of accurate debts: When necessary, we negotiate payment arrangements between our customers and their creditors for all accurate debts owed. This not only helps consumers do the ethical and responsible thing, it also changes an open, negative account to a paid, positive status.

Fourth – Help consumers establish new, good credit: Most consumers who have bad credit need new, good credit to start the rebuilding phase. When necessary, we help them establish new, positive credit which typically - can be as easy as simply opening a secured credit card.

Fifth – Set up identity theft monitoring programs: Once we’ve established an accurate credit report for a customer as well as assisted them in settling any open accounts and securing new credit, we implement a credit/ID Theft monitoring system. Should a consumer slip or become a victim of theft, we alert them to such instances, and jump in immediately to help rectify the matter.

Focus in educating the consumer
The entire Credit Optimization process emphasizes education, helping consumers understand when, why and how their credit score arrived at a situation where they required our help. Simply offering temporary – and potentially illegal fixes does little more than offering a band-aid for a broken limb. 

The complexity of achieving and maintaining an optimum credit score goes far beyond paying your bills on time. There are dozens of triggers in place to make you fail, most of which the average consumer has never heard of.

Our approach centers on providing customers the tools to remedy what went wrong and how to work within the system so that they can benefit from a positive and manageable credit profile.

So while we support the FTC and BBB efforts against credit repair companies, we ask that these organizations recognize and support other Credit Optimization firms, like MyCreditGroup for its valuable, effective and ethical processes in helping consumers.

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• What you can realistically expect from credit repair