What to Look for When Shopping for a Credit Repair Service

The FTC provides a list of warning signs to help you detect a credit repair scam such as avoiding companies that suggest that you try to invent a new identity or recommend that you not contact a credit reporting company directly.

These guidelines are a decent, albeit biased starting point as you begin shopping for a credit repair service, but they are only designed to help keep you from becoming a victim of a credit repair scam. What they do not do is help you find a good credit repair company.

Choosing a credit repair company is a big decision. Choosing the wrong company could cost you hundreds or even thousands of dollars, and if they are not successful, you have delayed your goal of a good credit score by months or even years. And if that wasn’t enough, using a fraudulent credit repair service could even get you in legal trouble.

So to help you through this process and help keep you safe from getting taken advantage of, we have assembled a sort of guide to shopping for a credit repair service. Below are some tips you can use to make sure you end up choosing a legitimate credit repair company to help you work towards achieving your credit goals.

Know how the credit system and credit repair work

Before you even begin searching for a credit repair service, you should know the basics of how the credit reporting system works. After all, you wouldn’t go shopping for a new car if you didn’t know anything about how to drive or how cars operate. So make sure before you begin looking for a credit repair service you understand the basics of how the credit bureaus operate, how your credit reports are created, and how they are used, and why it is your responsibility to ensure their accuracy.

Before you even consider taking out your credit card, you should also know the legal methods available to you for disputing bad credit, such as disputing negative credit with the credit bureaus and negotiating with your creditors to have them change the way they are reporting your accounts to the credit bureaus.

Also, be aware of less reputable “credit repair” tactics such as seasoned tradeline schemes that are designed to trick the credit scoring model into giving you a better credit score. These methods may work now, but their ongoing effectiveness is in question and the legality of such services is debatable.

Finally, know that “file segregation” schemes in which a company offers to create for you a brand new credit file are illegal, not only for the credit repair company, but for you as well.

You should also be aware that you have the right to order a free copy of your credit reports and to dispute your bad credit on your own.

Know what a credit repair company can and cannot do

Once you know what can be done to repair your credit, it makes it easier to understand what a credit repair company can do for you because, as the FTC says “everything a credit repair clinic can do for you, you can do for yourself.”

Despite what some credit repair providers would like you to believe, there are no secret tricks to repairing your credit. Credit repair companies use the same methods to clean up your credit reports that are available to you as a result of the numerous consumer protection statutes enacted to help protect you from being taken advantage of by creditors and the credit bureaus. The only difference is that an experienced credit repair company already has the knowledge and experience necessary to take advantage of these credit repair tools. In comparison, it may take you many hours of research and a few months of practice to figure out how to go about effectively restoring your credit.

But knowing what a credit repair company can do to help repair your credit is only a part of the story. You should also be aware of the laws regulating the credit repair industry. These laws dictate how a credit repair company can operate.

The Credit Repair Organizations Act (CROA) was passed to help protect you from fraudulent credit repair companies. Among the practices made illegal by CROA include charging for services before they are completed, not allowing customers to cancel the service at any time, and making any promises about deletions or improvements to credit scores.

Look at the services being provided

A credit repair company is legally able to provide all the same credit repair services you can perform for yourself, but this does not mean that all do. Many credit repair services only provide credit bureau disputes which can be effective for some people, but are typically less successful and take more time than pairing credit bureau disputes with other credit repair tactics.

Also take note of other services such as access to customer support, online account management tools, customer education, and others when looking for a credit repair company that fits your needs.

Look for experience and results

Because all credit repair companies are essentially offering the same services of creating dispute letters, working with creditors, and coaching customers, it is how well they perform these tasks that set one credit repair company apart from the competition.

Effective credit repair is predicated on experience and knowledge of the system. A credit repair company that has been operating for a number of years with a proven track record of results has had time to figure out what tactics work in certain situations. They can then apply this knowledge to your individual credit situation.

While no credit repair company is perfect and ultimately the success of any credit repair effort is dependent on your creditors and the credit bureaus, an experienced company will likely produce faster and more meaningful results than a relatively new company that is still learning the nuances of the system.

Look at the price tag

Credit repair service is not free. When contracting with a full service credit repair provider, you should expect to spend $500 or more for a year’s worth of service. For those people who are already struggling with the financial burden imposed by bad credit, this extra expense may not be the best use of you money if it will cause you to be late on other bills and damage your credit further. In this case, you should probably begin to work on repairing your credit yourself and if in the future your situation improves, you can hire a credit repair company to finish the job.

If you have the money to pay for someone to work on your credit, the goal is then to get the best value for your dollar. To determine this, take into account what services you will be getting for your money and make a best estimate of the relative quality of these services. This should help you get a feel for how companies compare to each other. For example, if one service charges $49 per month for credit bureau disputes and has been operating for only 2 years, you are probably better off using a competing service for $20 more per month that also provides creditor interventions and has been in business for a decade.

When looking at the price of a credit repair service, also consider the worst case scenario of what happens if a service is not able to provide you with satisfactory results. Do they have a refund policy? If so, what are the restrictions?

Finally, remember that credit repair companies have restrictions on when they can collect your money. Credit repair companies are not permitted to collect any fees until after the agreed upon service has been performed. This law is in place to protect you from a typical credit repair scam where a company charges a large upfront fee for service, often times in excess of $1000, and then disappear without doing anything to fix your credit.

Credit repair companies are also required to allow you to cancel the service within 3 days of signing the contract with no penalty and to cancel the service at any time once service has begun with no further financial obligations.

Because of these restrictions, you should avoid any company that charges large upfront fees or locks you into a long term contract.

Use your common sense

Just as you would at any other time when someone is asking you to part with your hard earned money, when you are looking at a credit repair service, trust your instincts and remember the old adage of anything that sounds too good to be true, probably is.

If a company promises the world, brags about secret methodologies, or guarantees good credit, they should be avoided. If a company claims 100% success, walk the other way.

A legitimate credit repair company will be forthcoming in their methodologies since they have nothing to hide. After all, they are not doing anything you couldn’t do too. A legitimate credit repair company will also admit their limitations. They know there are no guarantees when it comes to removing bad credit from your credit reports and if they state otherwise, they are lying.

Make sure you feel good about what you are purchasing before handing over your credit card number. If you have any doubts, give the company a call. If they are not able to address your concerns, you should probably look elsewhere.

Then, if after you sign up you start to second guess yourself, make sure to cancel the service within the 3 day window.

You should be completely confident that you are making the right decision. It is your credit that is on the line and your money that is being invested. Don’t let anyone pressure you into something that doesn’t feel right.

How Long Until Champion Credit Consulting Disappears?

Every few years the FTC takes a look at the various companies within the credit repair industry and shuts down those that are operating outside of the law (see Project Credit Despair). Judging by the number of companies out there who have crossed the line from playing by the rules to being openly non-compliant, the FTC is due for another shakedown.

Champion Credit Consulting (www.permanentcreditrepair.com) is the latest example of a credit repair company that is just begging to get shut down. In fact, their site is so over the top bad, we wouldn’t be surprised if their entire “too good to be true” business is designed to sucker people into dropping $1,500 for credit repair and then disappearing entirely.

To illustrate why Champion Credit will likely be shut down and why you should definitely avoid this service, we’ll use the same tactic that we used in a previous post when explaining why we advise against New Day Credit Consultants. Only this time, we’ll start with the more entertaining process of ripping apart the business as a whole and then move to talking about how Champion Credit Consulting is actually breaking the law.

First let’s focus on the messaging on Champion Credit Consulting site itself before moving to the broader picture of the company behind this credit repair service (this will make more sense later).

How their Credit Repair Process Works

They say: Dispute letters are worthless, yet that is all the rest can offer. If that is all it took to remove negative items, everyone in America would have 850 credit scores. We have one of 12 people on this planet that truly understands how to repair your credit and it has nothing to do with dispute letters.

The truth: Judging by the sample deletions show on the "Undisputable Proof" page and the customer agreement form, Champion uses dispute letters and just like everyone else. Each of the Equifax deletions letters start by stating "below are the results of your request for Equifax to reinvestigate certain elements of your Equifax credit file". The agreement also details a process where the customer will receive letters from the credit bureaus indicating that an investigation has been initiated and then another letter 6 to 8 weeks later with the results of the investigation. The customer is then asked to forward these letters to Champion so the process can begin again.

Funny how this sounds exactly like the dispute letter process used by every other credit repair company out there.

How the $10,000 Money Back Guarantee Works

They say: The only guarantee we offer is $10,000.00 cash to the client if we can't do what we say we can do.

And what do they say they do? 100% Removal of Negative Items! 100% Permanent Deletion! 100% FICO Score Improvement!

The truth: Dig into the customer agreement and you’ll see that Champion is not being completely honest with their $10,000 guarantee. According to their own documentation, the guarantee is only payable in the event that Champion is unable to remove from the customer’s credit reports one or more inquiries or any single negative entry including debts, collections, foreclosures, bankruptcy items, records of injunction, declaratory judgments by either a court of law or an arbiter, items of garnishment, records of repossessions, records of tax liens, records of liens, or any other derogatory or potentially damaging items.

The agreement also states that the $10,000 will be paid at the end of a 12 month period if the credit file has not improved or enhanced at all.

So in effect, Champion’s guarantee only ensures you that for your $1,500 investment; at least one item will be removed from your credit reports. Compared to the refund policies offered by other credit repair companies, this may be the worst refund policy out there. Plus, unlike other credit repair companies where you can cancel the service at any time if you are not seeing the results you like, Champion does not give customers the right to cancel and reserves the right to bring potential criminal charges against clients who attempt to get their bank to reverse payments.

Who Actually Performs the Credit Repair Work?

They say: A man in Florida who is supposedly a former Equifax executive will be handling all the work of repairing your credit using “out clauses and escape routes deliberately engineered to help out only a select few privileged enough to know about them”.

The truth: Depending on the number of people who fall for this scheme and the actual amount of work being performed, it may very well be possible for a single person to be performing the credit repair work, although it needs to be reiterated that this work has far more to do with creating dispute letters than utilizing any secret knowledge.

What is more interesting is that the work is not being performed by Champion Credit Consulting. Instead, Champion looks to have an affiliate relationship with Lang S. Smith, the CEO of what is referred to in the customer agreement as the Services Firm.

And this relationship does not appear to be unique. A quick search on Google turned up over a dozen other sites selling the exact same credit repair service as their own including acresystems.net, guaranteed-credit-repair.net, completecreditrestoration.com, scorerestore.org, guerillafico.com, investinmyfuture.net, deletemybadcredit.com, and supercredithelp.com.

Granted, there is nothing wrong with marketing through affiliates and many of the largest companies count on this as a sales channel, but the typical affiliate relationship involves affiliates driving potential clients back to the primary company and brand.

One might argue that this franchised approach is simply a unique marketing tactic for the industry, but given what we know about the service so far, a more practical reason for this is to allow the Services Firm to hide behind a number of sites that can be easily created and easily shut down. This allows the company to continue operating when affiliates get shut down or have a large number of complaints or negative publicity.

*****

At this point it should already be obvious that Champion Credit Consulting and all the other pseudo credit repair companies using the Lang S. Smith service should be avoided but if you need even more convincing, let look at how this credit repair service operates outside of the law, specifically the Credit Repair Organizations Act (CROA), and ultimately why this company will become a target of the FTC or another local law enforcement agency.

Improper Representation of Services

CROA: No person may make or use any untrue or misleading representation of the services of the credit repair organization.

Champion: 100% Removal of Negative Items! 100% Permanent Deletion! 100% FICO Score Improvement! We offer is $10,000.00 cash to the client if we can’t do what we say we can do.

How this is illegal: This one is obvious. No one can guarantee to clean up you credit reports. Ultimately it is up to the credit bureaus and your creditors to delete negative information from your credit reports and while legitimate credit repair companies have had great success deleting bad credit from their clients’ credit reports, any legitimate credit repair company will tell you that some bad credit simply cannot be repaired.

Also, no credit repair company can guarantee that a negative item will not be re-reported. Even Champion states that if a negative item comes back, they will try to remove it again.

As for guaranteeing to increase your credit score, nobody can do this because nobody knows exactly how your credit score is calculated. This proprietary algorithm is owned and licensed by FICO and even if the so called Equifax executive knew the algorithm, it has changed over the years.

Finally, and perhaps most importantly, we’ve already detailed how the $10,000 guarantee is particularly misleading.

Illegal Collection of Payments and No Cancellation Policy

CROA: No credit repair organization may charge or receive any money or other valuable consideration for the performance of any service which the credit repair organization has agreed to perform for any consumer before such service is fully performed

CROA: Any consumer may cancel any contract with any credit repair organization without penalty or obligation by notifying the credit repair organization of the consumer's intention to do so at any time before midnight of the 3rd business day which begins after the date on which the contract or agreement between the consumer and the credit repair organization is executed.

Champion: The price for service is a one time fee of $495 plus 6 monthly payments of $75. The $495 is to cover upfront legal costs. The $75 will be paid out on a monthly schedule, however, according to the customer agreement, the customer does not have the ability to cancel the service or request a chargeback once the services are initiated. As such, they have no choice but to pay the $1,500.

Champion: According to the customer agreement - Client additionally agrees to waive any and all right(s) to a chargeback with their banking institution as once services are initiated and performed, even if not to completion at such point, there is no way to undo them; and therefore services are considered rendered and will continue until services firm has completed its obligation as promised.

How this is illegal: In Champion’s own words, the $495 is to cover the upfront legal fees, however, according to CROA, this fee should not be collected until after the legal services have been performed. While not stating that Champion will delay drafting these fees until after the legal services have been performed may be an oversight, it seems unlikely that they are immediately performing $495 worth of legal services.

Secondly, Champion makes no mention of not collecting the $75 until the specific services associated with that fee are provided. Again, that could be an oversight, but it seems unlikely.

Whether or not Champion is illegally collecting fees is suspect based purely on what they say on their site, but it becomes obvious when you consider Champion’s charge back policy, or lack thereof.

Champion may appear to have a monthly payment plan that would be legally compliant if the monthly fees were collected after each month’s services were rendered, but they clearly state that customers are not able to request a chargeback (meaning the fee has been paid) once services have been initiated, even if not to completion. Again, in Champion’s own words, they are violating CROA.

Some may state that this seems like a technicality, but when coupled with the fact that Champion’s customer do not appear to have the right to cancel the service, once customers have committed to starting the service, they have no choice but to continue making the monthly payments until their bank accounts are a full $1,500 lighter.

Not Informing Customers of Rights

CROA: Any credit repair organization shall provide any consumer with the following written statement before any contract or agreement between the consumer and the credit repair organization is executed (See http://www.ftc.gov/os/statutes/croa/croa.shtm for full statement). This statement informs customers of their rights to dispute their credit on their own, to cancel a contract with any credit repair company within 3 business days from the date it was signed, and to sue a credit repair company that violates CROA.

Champion: The site does not contain the written statement mentioned above and has no information informing consumers that they can dispute their credit on their own and instead states that dispute letters are worthless. Champion does state on the sign-up form that customers can cancel service within 3 days but the customer agreement states that a threat of a lawsuit against the Services Firm will forfeit any and all guarantees.

How this is Illegal: We were unable to find the written statement required by CROA on the Champion site and while it is possible that is displayed after signing up for services, it is not worth $1,500 for us to find out.

*****

As we keep researching Champion Credit Consultants and this post keeps growing, we keep finding more things about Champion worth talking about but this has to end at some point. So to cap this credit repair scam thesis off, lets just briefly point out a few more tidbits that we found interesting.

Are we really supposed to put any stock in the newspaper clippings in the Newspaper Articles section? Why not state the name of the paper? Why don’t any of the articles have an author? Could it be that these are article/advertisements? It looks like the first paper is the Dallas Examiner. How much merit should I give a paper whose front page story for today is “Angie Stone Satisfying the sistahs and the brothas”? What New York paper is so bad that it allows an opening sentence with a typo and a misspelling?

You’ve got to like a company that bashes other credit repair firms with 12 month stipulations in their refund policy and then states in their contract that the sum of $10,000 will be paid at the end of a 12 month period.

Why even mention debts in the statement that "You get $10,000 if I fail to eliminate your debts, or repair, or enhance, or improve your credit or FICO score"? After all, it states right in the FAQs that using this service will "absolutely not" wipe out your debts.

Are we really supposed to believe that you can’t disclose the name of your Equifax expert "for fear that he might be harmed"? If so, you might want to look into personal security because if he spent 18 years as a "top executive" and is one of the 4 to 7 people at Equifax who knows what he knows, I bet the powers that be can figure out his name.

Champion claims that there are "escape routes" in the credit laws designed for the rich and privileged. But what is the point of that? Rich people don’t need credit.

If credit repair law firms simply send their work to Champion’s expert or someone like him, how many experts are there? Champion claims that there are only 12 people in the world that knows what their expert knows and odds are most of them are still working for a credit bureau. Then they make the statement that no one can do what he can on the entire planet except the other 15 people or so at the top of the 3 largest credit bureaus. Somehow the math doesn't add up. How can there be anyone like someone who no one else is like?

The customer agreement states that after 2 to 4 weeks of starting the service you will receive letters from Trans Union and Equifax, but what about Experian?

Why are customers instructed to log into an “Affiliate Resource Center” to receive updates? Are they customers or affiliates? Why does this stink of an MLM scheme?

If there was a secret "out clause" or "escape route", why would it take so long for the expert to repair your credit, why would repairing your credit take multiple attempts, and why would the refund policy be so weak? Why is it that whenever talking about what he can do it is smoke and mirrors and secret handshakes, but when it comes to the tangible things like the amount of time it takes to dispute bad credit, the fact that the credit bureaus will be sending you results of investigations, and the uncertainty of credit repair in general, Champion sounds like the typical small credit repair clinic.

Two Ways the Credit System is NOT like the Legal System

In the previous post it was argued that disputing bad credit is like pleading not guilty and while comparing the credit system to the legal system is a helpful analogy for understanding what credit repair is and how repairing your credit can help you legally improve your credit, it is also important to note that there are fundamental differences between these two systems.

The first difference between the legal system and the credit system is that in the legal system you are innocent until proven guilty. In the credit system, the exact opposite is true.

In the credit system you are assumed to be guilty as soon as a creditor reports to the credit bureaus that you have been late on a payment or committed some other credit "crime". Once this has been reported, you immediately begin your punishment in the form of a decreased credit score. There is no investigation performed and there is no proof required. You are considered guilty the moment you are accused.

At this point the argument could be made that when disputing an item on your credit reports, you are forcing the credit bureau and the creditor to prove your guilt but even this isn’t completely accurate. When performing an investigation, the credit bureaus are basically asking the creditor if the negative listing should remain on your credit reports or if it was reported incorrectly. Note that the creditor is not asked to “prove” that the listing is accurate and all they have to do to appease the credit bureaus is to state that there was no error. If this happens, the negative item remains and you are still being punished even though your transgression is still merely an unproven accusation by your creditor.

When an item is being reported inaccurately and confirmed by the reporting creditor (ie. the creditor’s records are incorrect and this incorrect data is being used to confirm the negative listing), it is up to you to prove your innocence. Doing so may require a number of tactics available to you through various consumer protection statutes and will likely take a significant amount of time for you to understand and apply successfully.

At the end of the day, proving your own innocence could be a difficult and time intensive task that you are forced into performing simply because you were falsely accused.

The second difference has to do with the classification of transgressions and the punishments handed out. For example, in the credit system, if you have your vehicle repossessed by a creditor, a repossession is recorded on your credit reports and you are punished in the same fashion as everyone else who has been accused of a repossession.

In the legal system however, we recognize that there are mitigating circumstances. For example, if your actions result in the death of another human being, you may be charged with murder, manslaughter, or homicide with numerous degrees of each. Because these distinctions are made, punishments can be assigned based on the nature of your actions.

If the legal system worked in the same way as the credit system, whether you caused someone’s death by stalking and killing them, in a moment of rage, in an automobile accident, in self defense, or in the line of duty, you would be punished exactly the same as everyone else who was accused of causing someone’s death.

It is in this inherent unfairness, the associated punishments, and relatively poor rights of the accused that causes so many people to have problems with the credit system. It is a system that has been largely molded by the credit bureaus and creditors. As opposed to the legal system that serves to protect the rights of the individual, the credit system serves to protect the profits of lenders.

Learning how to protect yourself as the underdog in the credit system is not easy task and because of this, the number of people receiving legal assistance from credit repair firms has continued to increase over the years. For many people, getting help from a credit repair specialist has been the only way they have been able to get a fair shake from the credit system.

More on the Idea that Disputing Bad Credit is like Pleading Not Guilty

Many people who begin looking at repairing their credit end up abandoning the task because they come to the conclusion that because all the negative things in their credit reports correspond to an actual life event, there is not hope. After all, the FTC states in no uncertain terms that “No one can legally remove accurate and timely negative information from a credit report”.

But if you think about it, you know this isn’t true. Look around the Web and you will see numerous sites talking about how to negotiate with creditors to have them remove negative listings from your credit reports. In addition, Fair Credit Reporting Act itself states that if an item is unverifiable (not the same as inaccurate), then the credit bureaus must remove it. Clearly, the FTC is at best being misleading when they state that no one can remove accurate and timely information from your credit reports when the truth is that it happens all the time through means that are 100% legal.

So how does this relate to pleading not guilty? Bear with me for a second while I tie then two ideas together.

Think about how a court of law works. When you are charged of a crime, you are given the options to plead guilty, not guilty, or no contest. When you are pleading guilty, you are admitting that you committed the illegal act and feel your best option is to accept the penalty. But what happens if you committed the act and feel the penalty is unjust? What if you had good reason for doing what you did and want a chance to explain your side of the story?

In our court system, the accused has a myriad of options available to them from requesting a trial to negotiating for a lesser penalty. These options, however, are only available if you plead not guilty. As you can see, the guilty/not guilty nomenclature here is not the same as the typical dictionary definitions of these terms. Traditionally, guilty means you did something and not guilty means you didn’t. But when you are submitting a plea in our legal system, pleading guilty is better thought of as accepting the standard consequences while pleading not guilty can be thought of as opting to pursue the other options that are available to you.

When applied to the credit reporting system, it makes it more clear what people mean when they equate disputing bad credit to pleading not guilty.

When a negative credit item is added to your credit reports, it is an accusation against you. You then have two options for how you want to deal with that negative item. The first option is to do nothing. This is pleading guilty. You are accepting the consequences that come with having the item on your credit reports such as higher interest rates, difficulty obtaining credit, and possibly the inability to purchase a home.

But what if you feel these punishments are excessive for your crime? If an illness in the family or some other event completely beyond your control caused your financial woes, is it really fair that you will be paying $100’s of dollars extra every month on a mortgage 5 years down the road? Is it really fair that although your finances have been perfect since that point, you can count on many more years of bad credit?

What if your financial problems get so out of hand that you are forced into a bankruptcy? After you include the 5 years it can take to settle debts under the new Chapter 13 legislation and then the 10 years the bankruptcy can remain on your credit reports, you could have a bankruptcy haunting your credit reports for 15 years. In terms of your finances, a bankruptcy on your credit report can set you back so far that it can amount to what is essentially a life sentence. Is it really fair to punish someone for the rest of their life because of something that may have been out of their control?

Fortunately, there are options available to anyone who has been “charged” with bad credit. By working to repair your credit, you are making the choice to explore these options and are pleading not guilty. And as explained above, you are not saying that you did not do the things that are reported on your credit reports. Instead, you are working to come up with a resolution that is fair.

By pleading not guilty to your bad credit, you are giving yourself the opportunity to negotiate for better terms, to explain your side of the story, and to force the “prosecution” to prove your guilt.

So like in a court of law, you have options. You can plead guilty by doing nothing to repair your credit report and in turn suffer the consequences of what has been reported regardless of how accurate and representative that information is of your credit worthiness. Or, you can plead not guilty by working to enforce your rights to a fair and accurate credit report.

Advice on New Day Credit Consultants – Ask and You Shall Receive

We recently received the following question posted as a comment on one of our previous blog posts and while it has the footprints of a manual spam attempt (possibly a new tactic after a few previous attempts at adding spam comments), we’ll oblige and give our thoughts.

Do you have any advice on credit repair specialists at www.newdaycreditconsultants.com? I need credit repair and am still in college. I’m only 20 and have bad credit from credit cards. My uncle said they are legitimate but the internet says that you need to watch out.

After a very short time looking at the New Day Credit Consultants site as a typical consumer, you will see all sorts of red flags other questionable elements that make you hold onto your pocketbook a little bit tighter. But since this is a credit repair blog, we’ll start with the analysis of the credit repair portion of the site and go from there.

As a consumer, you have the right to dispute any items on your credit reports that you feel are inaccurate or misleading. When a credit repair organization represents you, they are disputing your negative credit on your behalf. As such, they should only dispute the items that you feel should be disputed.

New Day Credit Consultants does not do this. Instead, with New Day Credit Consultants “every derogatory credit item on your credit history will be disputed from all three major credit bureaus.” This could include items you know are correct and negative items with a long credit history that may actually be helping your credit score. Using New Day Credit Consultants for credit repair puts you in violation of the Fair Credit Reporting Act and could possibly lower your credit score.

Another red flag regarding the New Day Credit Consultants service is their claim to “send dispute letters to the credit bureaus disputing the debts that you owe.” This tactic is fraudulent according to the FCRA and has the potential to do serious damage to your credit score. Disputing debts you legitimately owe with the credit bureaus will at best remove them from your credit reports, but it will not make the debt go away. You will still owe the debt and the creditor has every right to report the debt again.

What’s worse is that the disputing a debt you owe can have a couple of very negative side effects. First, when the credit bureau initiates the investigation, the creditor will frequently update the date on your negative listing making it more current. This will almost certainly lower your credit score because the negative item appears to be more recent in your credit history. In certain circumstances, this may also reset the statute of limitations on collecting the debt.

A second side effect is that by disputing the debt, your creditors will be notified that you are inquiring about the debt and they will also be able to access your current contact information. This frequently causes them to restart the collections process so you can expect to start receiving collections calls again.

But even aside from the credit repair red flags on the New Day Credit Consultants site, there are numerous things that should make you think twice about using the service.

Long term stability is one of the key traits you should look for when shopping for a credit repair service. It is a good sign when a credit repair company has been in business for a number of years because it is an indication that their methods are effective and legal. It is also a good sign when a company appears to be making a commitment to continue operating well into the future.

New Day Credit Consultants does not have either traits and while it is hard to fault a company for just getting started (after all, every company has to start new at some point), they do not look to be laying a solid foundation for the future. Behind the scenes, the newdaycreditconsultants.com domain was registered on November 6, 2007 and for only one year. Typically, any company or even individual looking to build a long term web presence will register their domain for 5 or 10 years.

Of course, even without looking at the domain whois information, it is painfully clear that the New Day Credit Consultants site is not being handled with the attention and care you would expect from a company who is asking to handle your most important financial information. It is a joke that a reputable organization would have such a myriad of design inconsistencies, foreign characters, and formatting flaws. Judging by the "Website powered by Network Solutions" inclusion in the footer of each page, it looks like the site has been created by an individual with zero web development experience who used (albeit poorly) a website creation utility provided by the website hosting company.

Honestly, the site is an embarrassment for the organization. One would expect that any company who is serious about their long term profitability would be willing to invest a few hundred dollars to have a respectable looking site created for them.

But then, even if the site had a respectable looking front, you should still be wary of a company whose online signup process is routed through PayPal. Once again, how indicative is it of the long term stability and dedication of New Day Credit Consultants is it that the online signup process is a simple PayPal integration where the only benefits are that it is easy to set up and does not require New Day to purchase a security certificate for their site? It’s one thing to be efficient and economical. It’s another to try to operate a business without even the most reasonable investments.

Finally, when researching any credit repair organization, it is a good idea to reference the BBB. In the case of New Day Credit Consultants, there are no BBB links on the site so a search was necessary. A nationwide search of the BBB site returns only one result for "New Day Credit Consultants". The listing is for a credit repair service in Los Angeles, California, the same state as the registrant of the newdaycreditconsultants.com domain.

The New Day Credit Consultants BBB report states that the company was started in 1991 and has a company rating of an “F”. According to the BBB, an F company rating means

We strongly question the company’s reliability for reasons such as that they have failed to respond to complaints, their advertising is grossly misleading, they are not in compliance with the law’s licensing or registration requirements, their complaints contain especially serious allegations, or the company’s industry is known for its fraudulent business practices.

While it is certainly possible that the New Day Credit Consultants company this article is about is different from the New Day Credit Consultants company referenced in the BBB report, the rarity of the name and the close proximity of the two company addresses make it seem less likely. Plus, if you were creating a new credit repair company, one would hope that the people behind New Day Credit Consultants would practice their due diligence and make sure there brand was not tainted before they even got going.

So in the end, this post has amounted to a very long answer to a short question. Our advice on New Day Credit Consultants is to avoid them entirely. There are too many other reputable and accredited credit repair companies out there to take the risk of allowing a company with the appearance of New Day Credit Consultants to work on your credit reports.