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Beware Credit Repair Companies That Do This: CFPB Sues Prime Marketing Holdings

September 26th, 2016 · Credit Repair

Beware Credit Repair Companies That Do This: CFPB Sues Prime Marketing HoldingsIt’s already bittersweet paying a credit repair company hundreds of dollars to do something you could do for yourself. What’s downright heartbreaking, though, is when you decide to trust them and relieve yourself of the job, and they let you down by breaking the law. The Consumer Financial Protection Bureau (CFPB) says that’s what Prime Marketing Holdings has been doing to consumers who sought their credit repair help. And the CFPB is suing them for it.

What They Allegedly Did Wrong

According to the CFPB, Prime Marketing Holdings:

  • Collected upfront fees. Credit repair companies are required to provide the service before charging consumers a dime. These illegal fees included set-up fees and fees for “special” credit reports, as well as monthly fees that consumers often didn’t know they were being charged.
  • Didn’t tell consumers that the money-back guarantee only applied if they paid for at least 6 months of service.
  • Led consumers to believe it was easy to have negative listings removed from credit reports, regardless of accuracy.
  • Led consumers to believe their credit repair services would lead to a “substantial” increase in their credit scores.

For these violations, the CFPB is suing Prime Marketing Holdings so as to refund affected consumers.

What to Watch Out For

If you are considering hiring a credit repair company, be sure you know the red flags to look for first:

  • Illegal upfront fees. If they ask for money before they’ve performed the service, don’t do it.
  • Unrealistic promises. No matter who tries to repair you credit, there are no guarantees. Listings may or may not be removed. Your credit score may or may not improve. And it doesn’t happen quickly; credit repair takes as long as it takes.
  • Improper disclosures. Make sure you receive a written contract and that it is acknowledged you have 3 business days to cancel. Make sure you know exactly what it’s going to cost and when you will be charged for what. And make sure they are open to answering any and all questions you have.
  • Creating a new identity. Under no circumstance is this a good idea; huge red flag.

Should you find yourself doing business with a company that violates any of these laws, report them immediately to the CFPB.

What You Can Do Instead

Repair your credit on your own. While there are legitimate credit repair companies out there, there is nothing they can do for you that you cannot do for yourself. And you can do it for nothing more than the cost of postage. Let our credit repair articles walk you through it every step of the way.

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Installment Loan Resource Guide: Mortgages

September 23rd, 2016 · Credit Repair

installment-loan-resource-guide-mortgagesWhen you’re applying for a home loan, there are a lot of things that can feel beyond your control. Understanding the process should not one of them. We have all the resources you need to educate yourself about the housing market and how to best position yourself for a loan you can afford. Get the facts before you delve in too deep.

The Basics of Buying a Home

Familiarize yourself with our homebuyers dictionary, mortgage calculators, underwriting guidelines, and loan criteria.

The Home Loan Toolkit

It’s never been easier to navigate your way through the home buying process. That’s thanks to the CFPB’s new free, online resource fr home buyers – Your Home Loan Toolkit, a 25-page interactive PDF that you can download here. Read more…

6 Tips for Homeowners Reentering the Housing Market

If you lost your home to foreclosure in the big burst of the housing crisis, good news is on the horizon. That foreclosure will be falling off your credit reports soon (after 7 years), if it hasn’t already. That means you could meet the criteria for a new home loan, if you are so inclined. Read more…

The Smart Way to Buy a Home with Bad Credit

For millions of families, the American dream of owning a home has been hijacked by the American nightmare – bad credit. What’s worse is that many people in this situation see only see two options – 1) accept their fate and give up on the dream completely, or 2) use their subprime credit score, as is, to take out a high-interest mortgage that ends up costing more than they can practically afford. Read more…

Helpful Changes Coming to Mortgage Servicing Rules

It’s been a little over 2 years since the Consumer Financial Protection Bureau’s (CFPB) new mortgage servicing rules went into effect. The goal? To give borrowers more rights and protections. Since then, the CFPB has kept a close eye on how well the mortgage servicing rules are working and proposed changes within just a few months that same year. Still, it’s a work in progress, as reflected by the latest tweaks to mortgage servicing rules in 2016. Read more…

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The Cost of Repairing Bad Credit: No More than Cost of Postage

September 22nd, 2016 · Credit Repair

The Cost of Repairing Bad Credit: No More than the Cost of PostageIf you think you have to pay an expensive credit repair company to get the job done, think again. Repairing bad credit is something you can do on your own for practically nothing. The only expense is a nominal one – the cost of sending credit repair letters via regular mail. Here’s how to get the job done.

Repairing Bad Credit Through the Mail

To find out which credit repair letters you need to write, take a look at your credit reports (which you can see for free via AnnualCreditReport.com).

If you find an error, send a dispute letter to the appropriate credit bureau. They are required to investigate and respond within 30 days of receipt of your letter.

If you are unable to resolve the issue through the credit bureau, it may be appropriate to send a dispute letter to the original creditor.

If you have an account in collection that you are not currently paying on, send a debt validation request to the collection agency. If they cannot prove they have the right to collect on the debt, you don’t have to pay them a dime and the listing must be removed from your credit reports.

What to Include in Your Letters

We have sample credit repair letters you can edit to your unique situation. Beyond that, include any supporting documentation that helps prove your case.

How to Mail Them

Though all three of the major credit reporting bureaus – Experian, Equifax, and TransUnion – have online dispute options, it is recommended you send them via Certified Mail with Return Receipt.

As of this writing, the cost of sending a 1-ounce letter via Certified Mail with Return Receipt is $6.47. That’s $3.30 for Certified Mail, $2.70 for the Return Receipt (green card you get back confirming when they received it), and $.47 for the regular cost of first class mail.

If you are including several supporting documents, it may be heavier than 1 ounce, which you can expect to be reflected in the price.

If you’re lucky, an issue may be resolved with one letter. It’s not uncommon, though, to need to send a follow-up letter, either to the same agency or a different one.

But even if you have several disputes you’re dealing with, all of which need follow-up letters, the cost to you for repairing bad credit will be a small fraction of the hundreds of dollars credit repair companies charge to do the very same thing.

Learn more about DIY credit repair.

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