One of my newest coaching students and I were on the phone today and he asked me why his dispute letters always seem to get the same generic response from the credit bureaus. I mentioned to him that credit repair can be a very tedious and frustrating process! Often times when you send in a letter to the Credit Bureaus, human eyes never see your letter. Allow me to explain;

   According to the National Association of Consumer Advocates (NACA) June 2003 testimony regarding the “Fair Credit Reporting Act: How It Functions for Consumers and the Economy”, approximately 80% of all consumer disputes are made in writing.  Page six of their testimony states: “Each agency has a different process for handling these disputes, but all three use a similar system.  The three bureaus collaborated through their trade organization to automate the entire reinvestigation process using an online computer program, E-Oscar.  Upon receiving a written dispute, often in the form of a detailed letter with documents attached, the CRA assigns the dispute to its dispute department”.  “No matter how detailed the written dispute, the CRA will merely translate it into a two digit code and, usually by automated means (ACDV), send a message to the furnisher identifying the code its employee believes best describes the dispute.  The employees of all three CRAs operate under a quota system whereby each employee is expected to process all of the disputes of an individual consumer in less than four minutes”. 

   Now let’s fast forward from June 2003 to August 2006 and examine the FTC’s “Report to Congress on the Fair Credit Reporting Act Dispute Process”.  Page eighteen of the FTC’s report states: “TransUnion stated that it typically does not supply copies of consumer-supplied documentation to furnishers but added that, ‘if the documentation can be reasonably verified as being authentic, the account is automatically updated based on the documentation, in lieu of sending an ACDV or CDV.’  Equifax noted that it currently provides two methods of supplementing the e-OSCAR dispute codes and free-form field: (1) a copy of documentation can be faxed to the furnisher as appropriate and (2) furnishers can contact CRAs with questions they have about a particular dispute”.

  So is it any wonder that the credit bureaus LOVE e-OSCAR (a/k/a the ACDV)? 

   In my credit repair book Crushing The Credit Bureaus I show you the exact way to write and more importantly send in your dispute letters for maximum effect.

   I wanted to share with my readers some insight a couple of colleagues shared with me over the weekend when I was speaking at a Private Money Investment Seminar for Real Estate Investors In Atlanta.

   One of the topics that came up was how these real estate investors could help some of their clients or customers that they are working with on real estate transactions. Some were other investors who needed high scores to qualify for loans, others were investors who needed to sell a property and they wanted their buyers to fix their bad credit.

   Every time you turn on the TV or open the newspaper, you see stories of people who are suffering from the financial effects of bad credit.  They are in over their heads with credit card debt, and may be at risk of losing their homes to foreclosure.  I mentioned to the attendees of my workshop presentation that “Hey, you know a little something about credit repair – you will able to raise your own credit score recently.  You are the perfect candidate to help other people solve their credit problems.  You can become a credit restoration specialist.”

 In this article I wanted to give y’all some tips for preparing for this fast growing field.

Tip #1:  Get smart.  

   Gather all of the information you will need to be successful.  Invest in manuals or other educational materials that provide you with proven tips and techniques for helping others with their credit problems. My book Crushing The Credit Bureaus would be a good start.

Some publishers offer home study courses, eBooks, and even audio CDs that will help you build the knowledge base you will need.

Tip #2: Stay legal.  

   This past week there were over 30 Credit Repair Companies that were shut down by the FTC. Most of them I had never heard of, but some of them were household names in the credit repair world. There are an increasing number of laws and regulations being enacted to protect consumers in financial trouble.  

   You need to be aware of them all.  And remember that some of the legal information will be specific to your state.  You may even have to be licensed or certified to practice in your area.  You will want to share legal disclosures and disclaimers with your clients; this protects you from legal risk while informing your client of what you can and cannot do legally.

Tip #3:  Be reputable.

   Consumers in trouble will be wary of those offering to help – they may have been burned by a shady credit repair company in the past.  It’s up to you to deal with your clients honestly, and with integrity. Joining a better business bureau or other professional organization in your area will help add to your credibility.
Tip #4:  Loose Lips, Sink Ships.  

   Your clients will be entrusting you with private, personal financial information.  You must respect the confidentiality of the information you are given.  A sure way to ruin your career in credit restoration is by violating that trust by sharing that information with others.

Tip #5:  Select a method.  

   You can provide your credit restoration services on a private, one-to-one basis, or by holding credit counseling classes for a group of clients.  You might offer a free seminar, where you describe what you can do to improve your client’s credit and raise their credit scores.  Use the seminar to build your base of paying clients.

Tip #6:  Stay current.  

   Lawmakers are finally taking action to help solve the average American’s credit problems.  You need to find a resource that provides you with frequently updated information about today’s laws, regulations, and techniques related to repairing credit.

   The success of your credit restoration business will depend on your ability empathize with your clients, negotiate with their lenders, and carefully document all your efforts.  Credit repair is an art, not a science.  You won’t be able to help 100% of your clients.  But if you are realistic in your goals and apply yourself diligently, your clients (and your bank account) will thank you.

Stay Tuned,

Your Credit Score Insider,

Mark