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Old 07-06-2011, 03:54 PM   #1
XDCX
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Default Consumer Credit Repair Services

Consumer Credit Score Repair Services




While we've all probably watched hundreds of late night television commercials touting Credit Repair Services to the general public, I recently received a promotional flyer from a company that offers these services to their dealership clients.

The company indicates their clients will be able to establish a new line of credit for their customers while they're still in the showroom and this new account will be reported to all three credit bureaus within minutes. The company further states this new line of credit plus some other efforts made on their behalf will result in a 40 - 80 point FICO improvement in just three and a half days.

Essentially I have three questions:
  1. Have you heard of this Credit Score Repair Service before?
  2. Do you think it would actually work?
  3. Do you think it's legal/ethical?
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Old 07-07-2011, 09:47 AM   #2
birch3x
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Wow, that's an ambitious claim. I think there are 2 distinctly different reasons for people to have poor credit and low bureau scores. It's 'lifestyle' vs 'event'. People withe a poor credit lifestyle are overextended, everything's financed, they get high rates and are always about 59 days late with everything. The phone is ringing with debt collectors, the mail is full of past dues, and they simply don't care. That's why the subprime market is so big. The people who have an event that causes their credit ratings to fall are people who were always on time or early with payments until something happened. Divorce, injury, job loss, etc. These people get back on their feet and get caught up. Okay, so that being said, I don't think the service will work because the reporting agencies wait for months to see if it's a lifestyle or event. Legal? Sure. It's probably just a way to lend more money. Ethical? No.

Last edited by birch3x; 07-07-2011 at 09:59 AM. Reason: spelling
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Old 07-07-2011, 10:01 AM   #3
jayhawk
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no. no, and ethically no.
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Old 07-07-2011, 10:02 AM   #4
57years
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I watched a movie last night, and I can't recommend it enough. "INSIDE JOB" is a fairly non partison look at the financial crisis, causes and current situation. Every Washington D.C. insider gets the blame, even though Barney Frank and Soros are interviewed as "experts." I had rented it, and now am buying one to pass around to my friends. There is more violence in this film than an R ate, but it's violence to our former way of life (before 2008). This whole credit score and paper bundling are highlighted, along with, believe it or not, financial speculators BUYING INSURANCE against default on Collateralized debt obligations in which THEY HAD NO RISK!!!! This is 2 hours WELL SPENT!
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Old 07-18-2011, 12:20 PM   #5
XDCX
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Quote:
Originally Posted by birch3x View Post
Wow, that's an ambitious claim. I think there are 2 distinctly different reasons for people to have poor credit and low bureau scores. It's 'lifestyle' vs 'event'. People withe a poor credit lifestyle are overextended, everything's financed, they get high rates and are always about 59 days late with everything. The phone is ringing with debt collectors, the mail is full of past dues, and they simply don't care. That's why the subprime market is so big. The people who have an event that causes their credit ratings to fall are people who were always on time or early with payments until something happened. Divorce, injury, job loss, etc. These people get back on their feet and get caught up. Okay, so that being said, I don't think the service will work because the reporting agencies wait for months to see if it's a lifestyle or event. Legal? Sure. It's probably just a way to lend more money. Ethical? No.
Great post - I've been meaning to respond but I'm just now getting caught up.

I think you're 100% spot on with the way you categorize people who have poor credit and low bureau scores. The challenge is for the lenders (or BHPH Dealers) to figure out which category their customer falls into before they extend the loan.

I also agree with your assessment that the concept mentioned in this thread is probably legal but fails to pass the same standards concerning ethics or effectiveness. I really doubt it's that easy to "game" the three credit rating agencies and increase a customer's credit score.
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Old 07-18-2011, 12:35 PM   #6
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Quote:
Originally Posted by 57years View Post
I watched a movie last night, and I can't recommend it enough. "INSIDE JOB" is a fairly non partison look at the financial crisis, causes and current situation. Every Washington D.C. insider gets the blame, even though Barney Frank and Soros are interviewed as "experts." I had rented it, and now am buying one to pass around to my friends. There is more violence in this film than an R ate, but it's violence to our former way of life (before 2008). This whole credit score and paper bundling are highlighted, along with, believe it or not, financial speculators BUYING INSURANCE against default on Collateralized debt obligations in which THEY HAD NO RISK!!!! This is 2 hours WELL SPENT!
I'll have to look into renting that movie. Here's the trailer for the "Inside Job" via YouTube: click here

Most of my stock market losses were due to exactly what's described in this film. I was invested in a company that had Billions of AAA rated debt that ended up being worth about 30 cents on the dollar. The credit rating agencies like Moody's and Standard and Poors were issuing AAA ratings to debt that included the toxic "no documentation loans" that were common at the height of the real estate bubble in 2007.

In fact, the whole real estate boom and subsequent collapse could have never happened if the credit rating agencies did their job.

Sorry for the rant....
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