Sometimes Even the Experts Get Confused About Credit Repair

Daniel from New York wrote into CNBC’s “Ask The Experts” feature with the following question:

“Are there ANY credit repair companies that are legit? I’ve used a couple and both times they have been scams. I obviously won’t do it again but people should be aware if they are all trying to rip you off!!”

His concern is valid. There are all too many credit repair clinics out there who are much more interested in separating you from your cash than in helping your credit situation. But the response he received is even more concerning.

In her response to Daniel’s question, Carmen Wong Ulrich host of the program “On the Money” states:

“People should be aware that there is NO such thing as “debt repair” and the services that promise this are not legit. There are only a couple of legitimate things you can do with your debt besides paying it down: You can consolidate your debts into one, fixed-rate (hopefully lower) loan and you can settle your debts though it greatly damages your credit.”

The information Carmen provides is correct, but the problem is, she did not answer the question being posed. Daniel asked about credit repair which are absolutely not the same as “debt repair”. In fact, Daniel made no mention of debt at all. In confusing the two, Carmen has provided information that may dissuade people with a genuine need from seeking help with their credit.

A better answer would be to say that, yes; there are credit repair clinics to be avoided. Clinics who operate in opposition to the industry laws and regulations designed to help protect consumers from becoming a victim of a credit repair scam.

But while there are fraudulent credit repair companies to watch out for, there are also numerous legitimate credit correction organizations like Lexington Law who have helped hundreds of thousands of Americans make use of their rights to fair and accurate credit reporting. Organizations that operate in full compliance of the law and provide highly valuable services to the untold number of consumers whose credit reports contain inaccurate, misleading, biased, and incomplete information.

In addition, Daniel’s question also presented the perfect opportunity to provide information about what people can do to repair their credit themselves, what to look for in a credit repair organization if they decide they need help, and warning signs to look for when dealing with a credit repair scam. The opportunity, however, was missed.

It is unfortunate that an expert would confuse credit repair with credit counseling or debt management services. It is even more unfortunate that it was done in a public format by a trusted personality.