The debate continues to rage about whether or not consumers’ best interests are served by using credit repair clinics and related firms to help repair, improve or fix their credit scores. Much of the venom about the industry is the result of the small number of firms that have taken financial advantage of their customers in unconscionable ways. These rogue firms have repetitively over-promised and under-delivered.
Governments, both Federal and state, have long argued that these credit repair firms are unnecessary because consumers can themselves perform the steps required to correct errors in their credit reports. To bolster their argument, they have prepared and distributed booklets and brochures urging people to use that information to perform the restoration services for themselves and not to use credit repair clinics.
Is “Do-It-Yourself Credit Repair” a viable option for consumers? Are credit repair firms necessary and advisable? These are the two questions explored below.
There is ample evidence that consumers can perform many of the services required to build, correct, and restore their own credit. Many of the errors that populate credit reports, for example, can be fixed by simple correspondence with creditors and the credit bureaus. Some errors, however, require more complex knowledge of applicable laws than most consumers have. This does not means individuals cannot prevail, but it does mean they will have to spend time and/or money to become proficient in those areas of the law in order to achieve the desired results.
The answer to the question of whether firms in this arena have value is a conditional “YES.” There is a definite need for people who specialize in helping consumers improve their credit.
The operators of these firms provide a valuable and desirable option to consumers who cannot or who choose not to spend time fixing their own credit report. Using a credit repair agency is a valid choice for these individuals, and that choice is one that should not be taken away. In addition to bringing expertise, these firms may also bring an assertiveness that may be absent in the consumer. There are instances where a third party can achieve results that the impacted party cannot achieve directly for whatever reason. When choosing a repair service the consumer needs information in order to choose a firm that is reputable and honest.
The argument that consumers can perform this function for themselves is hollow. Many businesses earn profits doing what many consumers can do for themselves. We hire people to cut our grass and clean our houses, not because we are incapable of doing things but for convenience. We even hire attorneys to represent us in minor matters rather than speak for ourselves. Should these businesses be banned using the same logic that is often applied to credit repair businesses? I think not. Ultimately, each potential user must decide how to spend their time and money, even if it appears to be a poor choice to others.