If you haven’t seen them yet, The Ad Council has begun running some PSA’s on TV and Radio aimed at people who would want to improve their credit scores and might go looking for a company that could help them accomplish this goal.
The Ad’s talk about the fictitious character “The Credit Fairy”. In one Ad, One guy is playing video games while the other gives him a hard time about the fact that there is no credit fairy and he is foolish for having believed that someone could just wave a wand and make his credit get better. Of course, this is the true part of the Ad. Its not that easy obviously, but there are those who almost make it sound this way…and they are the people that the public needs to be warned about.
As a Utah Mortgage Professional, I am on the fence about this PSA campaign. On the one hand it must be said that the credit repair industry has earned its reputation. No doubt there is a genuine need for someone, like these PSA’s, to warn people of the pitfalls of paying someone to help you fix your credit. Especially for someone who wants to improve their credit to qualify for a mortgage so they can buy a home.
I have to admit that I found it pretty funny and amusing at first.
But it begs the question; is it accurate?
Are you doing the public a disservice when you equate someone who can help you navigate the many different statutes and rules contained in the Fair Debt Collection Practices Act to a mythical creature that does not exist?
The images these Ad’s give are genius…it makes the point perfectly:
Fixing your credit is like hunting for Bigfoot.
But is it?
In my opinion, this is like saying that you won’t need a lawyer to help you in an injury case. Sometimes you really won’t need one, and there are times when its crucial to get someone who is your advocate and knows and understands the laws.
The very existence of the FCRA or Fair Credit Reporting Act, demonstrates the very real need on the part of consumers to have access to real, reliable and easy to understand methods of correcting errors in credit reporting.
Studies done by the Public Interest Research Group (PIRG) and the Government Accounting Office (GAO) concluded that nearly 3/4 of all credit reports (that’s on approximately 200,000,000 Americans…so like 150,000,000 credit reports) contain errors. Of those errors, they concluded that 25% of them would result in outright denials of credit.
Having worked in Real Estate in Utah for over 10 years, I can tell you that not only would many of these result in outright denial, but higher rates and more difficult underwriting as well.
The truth of the matter lies somewhere in the middle. Don’t listen to the “credit fairies” that tell you they can remove anything and that they can make your credit better over night.
Moreover, don’t pay someone to do it for you. The law says its illegal…
Even if they are selling a book, or ‘coaching’ or some other way of skirting the law. If they are willing to break the law to charge you upfront for credit repair…is that really who you want to entrust your financial future to?
If you are simply looking to improve your credit for the sake of having better credit, pay your bills on time, maintain a good mixture of credit types and keep your balances below 10% of the available credit. In time you will have very good scores. This is the essence of the Ad Council’s message, as well as the FTC’s message on Credit Repair.
But it is not the whole story;
The FTC campaign against credit repair companies is warranted, but inaccurate. In their zeal, I think they may have gone too far. By convincing consumers that getting help is like hunting for The Loch Ness Monster, many will give up hope rather than enjoying the benefits of improving their credit such as owing a home or obtaining a mortgage to do so. I’ve had bad credit clients that I was able to help get a loan within 30 days! Take that and stuff it under your pillow FTC.
Here is my unconditional promise to anyone looking to obtain a mortgage in Utah that may have credit issues. We have the results to back up what I am saying, and we don’t ever ask for money for our services. We simply hope that once we have proven ourselves with real results and you have good enough credit to get a mortgage that you would consider using us as your Utah Mortgage Lender.
