Watching: Lexington Insider: Innovative credit repair tactics.

Hello, I'm Gavin the Credit Coach and this is the second in a series of videos called “Lexington 360” – a three-hundred and sixty degree look at the inside workings of the nation's largest and well-established credit correction law firm. In this series we'll explore the three major components of the Lexington Law services, and we'll take a look behind the curtain to see how it's all done.

Today, we'll be exploring one of the greatest innovations to impact credit correction in fifteen years – creditor interventions. As you may already know, your credit worthiness is one hundred percent dependent on a three digit number – your credit score.

Generally speaking, a 700 credit score is the bottom-limit of traditional credit worthiness. Anything below that and qualifying for credit is difficult and expensive.

Your score can be hammered down by bad marks such as:
Negative listings including late payments
Judgments, collections, bankruptcy
And even creditor inquiries.

Addressing a low credit score is more complex than most people think. Removing negative listings is important – but it's not the only component of credit improvement. Lexington Law employs a three-prong approach.

The first prong involves the credit bureaus – these companies collect and house your credit information. Contrary to popular misconception, they're not part of the government and they're definitely for-profit companies.

By sending a series of carefully written dispute letters to the three credit bureaus, the firm works to trigger an investigation into the questionable negatives on the client's report. If the information is found to be inaccurate, or if the information isn't verified, then the negative items are removed or improved.

At the same time, if you're a Concord-level client, the firm conducts phased interventions with the creditors who reported the questionable information to the credit bureaus in the first place.

Many of these communications result in the removal of more questionable negative listings from the credit report – either because the credit company decides to give you the benefit of the doubt or because they cannot backup the information they previously reported.

If you're a Concord Premier-level client, the firm also goes to work with you on improving the host of other factors that also impact your credit score. We call those factors “scoremakers”. Removing negatives isn't enough to get maximum score impact. We must go deeper into the credit report to touch all the factors that will make up that all-important three-digit credit score.

These scoremakers include your “maxed-out ratios,” the amount of good credit, your account balances, your types of credit and even your credit inquiries.

As you can see, the Lexington Law Concord Premier service takes on all three of the major areas of your credit report and, therefore, all of the major factors affecting your credit score.

Today, we'll focus on the second dimension of the Lexington pie: creditor interventions.

There are consumer protection statutes that regulate credit bureaus, and there are other statutes that regulate how creditors should behave. But these statutes are almost unnecessary with some creditors, especially with the help of an attorney. By asking properly – and often by asking nicely – many creditors are willing to help you out with your credit simply in the name of good customer relations.

I'm back with the Lexington Law Attorney Roundtable and today we're talking about “creditor interventions.” That's an interesting term, John. What's a “creditor intervention” anyway?

Kevin Jones: An intervention is the type of letter we send out directly to the creditors on behalf of our clients. These are letters that range anywhere from very gentle, non-adversarial letters that simply request that a creditor look into a client's negative item that it has with the creditor and that the creditor would remove that item; perhaps because the client has been a good customer of the creditor. Elevated on up to more firm letters that require that creditor to look into the negative listing they've placed on the client's credit report, based on their duties under federal law.

John Heath: It's good to remember that the interventions letters are in addition to the dispute letters that we send to the credit bureaus. At the same time that we're targeting the items on your credit report, we're also going to be targeting those items with the creditors that reported those items to the credit bureaus.

Jeff Meyer: Imagine a situation; you've got a credit card and you've been a good client of let's say, Citibank, or MasterCard, or whoever it is – whoever holds your credit card – and kind of point out to them about the relationship itself. This has been a good one. This works both ways. In return for that, perhaps what you can do is help our client out. You can acknowledge that fact that they have been a good client for so long. Perhaps take it off in consideration of that good relationship.

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There's a huge difference between the credit bureaus and creditors – to the credit bureaus, you're not their customer. You're a person they track. That's it.

The true customers of the credit bureaus are the banks, credit card companies and collection agencies. Anytime a consumer talks to a credit bureau, you're burning up their resources.

To the other credit companies, you're far more than just a number. You're a customer. None of these creditors really gain anything by reporting negative marks on your credit report. They don't make money for reporting you negatively.

Creditors would sometimes rather do you, their customer, a favor, than quibble over your side of the story versus theirs.

But Lexington Law Firm doesn't use just one approach to creditors. Using a soft touch doesn't always work. The tenor of the intervention becomes downright serious as your case makes its way into the third and fourth quarters.

Gavin: I understand how you crank up the heat on a client's case as it proceeds. But, why wouldn't you just start the client's case with the most forceful letters right from the beginning?

John Heath: I mean, certainly, we could send out a letter that is heavy-handed, or threatening. But we're not going to get the result that we want, a lot of times, because that will force the creditor to posture. What we want to do, is remind the creditor of the good history that they've had with their costumer, you. And after reminding them of that history, we want to make sure that they understand that in order to continue that good relationship that they need to do some things for us. But we can do this in a very amicable and very light way, so that they creditor doesn't posture from the very beginning.

Kevin Jones: In many cases, the non-adversarial intervention letter is all we need to get the questionable item removed from the client's credit report. If we were to start with a heavy-handed letter the chances that a client may immediately become intransigent, and as John said, dig in his or her heels, and refuse to even review the case becomes more likely. Versus a more staggered approach of starting off soft and slowly increasing the pressure on the client. We felt that that's much more successful than starting out heavy-handed.

Jeff Meyer: You know, we'll assume in any given case that the credit bureaus are going to do the right thing. We'll assume that to begin with, and we'll use a diplomatic approach. We'll simply point out the error and we'll ask them to honor the law. It's when they don't that we save the more aggressive tactics for that time. It's just like in anything else, we're not going to want to start out creating a bad relationship and get off on the wrong foot from the get-go. We choose to wait. We'll wait until it's appropriate. And when it's appropriate, we'll use a different tone.

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Lexington Law Firm pioneered this approach and remains, we believe, the most sophisticated provider of these services in the country today.

Don't forget, though: deleting questionable listings is only part of the credit correction process. Tune in to the last episode of Lexington 360 to see how the attorneys and experts of Lexington Law take on the critical, but less-understood scoremakers.

Until next time, I'm Gavin, your Credit Coach. And remember: together we can do this.