To understand how credit repair works, it’s important to first understand how credit reporting really works.  Most people misunderstand the whole credit system.  Trans Union, Equifax, and Experian are just three really big companies that are in business to make a profit.  They have two main activities: 1) they collect information, and 2) they sell that information.  They collect information from creditors, courts, and many other sources.  They warehouse that data in their computers and then sell the information in many different forms, such as marketing lists (where do you think credit card offers come from) and, of course, credit reports.

Most people understand that the credit bureaus make a profit when they sell our information (such as when they sell a credit report).  But, you might be surprised to find out that the bureaus also make a profit when they collect our information – the credit bureaus charge a fee whenever a creditor puts an item (or an update) on your credit report!  Why is that important you ask…well let’s think about a situation where Joe Consumer owes ABC Collection Company $300.  Say that Joe calls ABC one day:

Joe:  “I’ll pay you off, but I want you to remove yourself from my credit report.”
ABC: “No problem Joe, we’ll update your credit right away, we promise.  Now, is that going to be a debit or credit card today?”

Joe made a deal with them, and then he paid them.  He has every right to expect them to hold up their end of the agreement and update his credit.  But guess what…all too often a creditor will get paid (meaning they no longer care about the person who paid them) and then make a business decision to NOT spend the money and update that person’s credit.  It’s free for them to just stop reporting, but it would cost them money to follow through and report to the bureaus that Joe’s account is paid off.   

Many times we work with credit reports that have accounts still showing a balance owed, but the creditor stopped reporting (they were paid off, they wrote it off, they sold the debt to another collector, etc).  This information is simply wrong, and we can help to get it removed from your credit!  When a person files for bankruptcy, the creditors who are being included usually report that they are being included in a bankruptcy (technically, the consumer still owes the money until the bankruptcy is actually discharged by the courts).  But when the bankruptcy is discharged (meaning that the consumer no longer legally owes the debt), oftentimes creditors will not follow through and spend the money to report that the balance owed is now zero.  Again, they simply stop reporting (because that’s free) – which means that the consumer ends up with a credit report that looks like they still owe many of those debts when they really don’t.