Credit Repair Attorney vs. Agencies (Your Best Option?)

By James Young on April 16, 2014

Life happens. For more and more prospective home owners, life events like divorce, job loss and unexpected medial bills overshadow their hopes of obtaining a future mortgage. While there is no substitute for time when it comes to repairing dings to your credit report, most consumers still look for help in accelerating the process.

That help may come in the form of:

  • engaging the services of a credit repair attorney;
  • signing up with a credit repair agency; or
  • finding some other route to speed up the credit repair process.

Working With a Credit Repair Attorney

One of the biggest advantages to hiring a credit repair attorney is that he or she can represent you with debt collectors and put a halt to harassing phone calls if you have active collection practices taking place.

Perhaps even more important, a credit repair attorney is more likely to have the ability to take fullest advantage of the Fair Credit Reporting Act, the primary law that protects you from unfair practices of the credit industry.

A credit repair attorney will likely recommend you begin your credit repair journey by eliminating as much outstanding debt on your credit report as possible. He or she can guide you through your options of paying debts in full, settling debt or discharging debt through bankruptcy, depending on your short-term and long-term goals for using credit.

A credit repair attorney will be able to discuss fully the legal and practical ramifications of each potential step in the credit repair process and help you to choose the best route for your particular circumstances.

Another advantage to hiring a credit repair attorney is that you can more easily file a lawsuit against a creditor, if necessary, to force the removal of inaccurate or unsubstantiated records negatively impacting your score. Unlike a credit repair agency or similar service, a credit repair attorney has substantial experience and full command of the law to yield the best possible results for you.

Credit Repair Agencies

Both for-profit and not-for-profit credit repair services exist for the stated purpose of helping consumers to repair their credit. Unlike credit repair attorneys, however, many of these are limited in the assistance they can provide.

While the federal Credit Repair Organizations Act prohibits for-profit agencies from making certain claims or offering certain credit repair services, there are still plenty of credit repair agencies scamming consumers by attempting to go around the law by organizing as a nonprofit.

Just because a credit repair organization is a nonprofit, you should not be lulled into a false sense of security about its business practices. instead, carefully investigate the agency’s fees, services and reputation through such tools as the Better Business Bureau and your local consumer protection agency. Nonprofit status can be verified through the Internal Revenue Service.

There are legitimate credit repair agencies that educate and counsel consumers about good financial behavior and you may find such services to be helpful. Some may even have their own credit repair attorneys on staff. Those that do, may be offering the best of both worlds.

However, beware of agencies that claim they will be able to raise your score by cleaning up your credit file. Paying significant fees for steps you can actually take yourself is money wasted and may not get you the results you desire.

Worse, some agencies can actually make matters worse through the approach they take. These organizations attack the problem by bombarding the credit bureaus with form letters challenging every potentially negative item on your credit report. They then repeat the process month after month.

The most likely result of this assault isn’t an improved credit rating, however. Instead, credit bureaus are likely to dismiss these efforts as frivolous. Such actions by these agencies may even result in some accounts becoming “re-aged,” meaning their most recent activity dates are updated so that the negative item actually stays on your account longer than it would have otherwise.

Slow and Steady Course

The most important step you can take in repairing you credit is to stay the course of making sound financial decisions. Pay your bills on time, pay off debt as quickly as possible and use credit wisely.

Credit counselors may have a role in helping you repair your credit if you choose an agency carefully and do your homework. Keep in mind, however, that most of the services you will be paying for are actions you could take on your own for free. Also, it’s important to discuss an agency’s course of action in detail and avoid services that run the risk of harming your credit rather than improving it.

Depending on your credit problems, hiring a credit repair attorney could prove advantageous, particularly if you have inaccurate information on your report that the original creditor refuses to remove. If you also feel you could benefit from some financial counseling, consider a credit repair counseling agency with an attorney on staff.

An attorney can also act as your experienced and knowledgeable representative in negotiating debt repayment plans, halting illegal collection activities and following whatever legal avenues may be available to you in improving your credit score.

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About James Young

My name is James Young- I love red wine, sailing, and playing guitar. I believe that everyday is truly a gift. I'm blessed to live five minutes from the sand in the beautiful city of Long Beach, CA. When I'm not assisting homeowners, you'll find me belting melodies with friends around a campfire, wandering the halls of an art exhibit, or watching ESPN re-runs until the sun comes up. So what am I doing here, you might ask? In a couple of sentences- I'm passionate about empowering first-time and experienced home buyers to make their dreams a reality. Whether it's saving thousands on your home loan, buying your first home, or acquiring your first investment property, I'm always here to help. Don't hesitate to ask questions, and please remember to "share the love"! :) #loveloans #loverealestate #lovelife!