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Credit Education
Credit Revolution
Chapter 13

Do-it-yourselfers, Deceivers, Discounters and Damage-collectors

Despite the endless blather being churned out by consumer advocate "experts" that "only time can cure bad credit," there's a small (but growing) corps of people who offer to expedite the credit correction and credit improvement process. But, they're a mixed bag of competent professionals and loudmouth cranks. If you're going to seek credit repair assistance, you'd better learn the difference, because these guys can either be a godsend or they can make your credit situation even worse.

Do-it-yourselfers
In the age of the internet, information is cheap (but you often get what you pay for). The world wide web is chock full of people who have styled themselves as experts in the art of beating the system. Truth is, they have many great ideas and have forged the way to empowering people to make a hobby of their personal credit score and credit history. It is encouraging to see that regular people can take control of their situation and manipulate the credit institutions to go to work for them, instead of the other way around. There are a couple of drawbacks to following the ranks of self-appointed consumer information hobbyists. First, not all great consumer strategies are created equal. Many of these plans don't work or are greatly oversimplified. Second, even if the quality of the information is top-rate, it may be very tough to implement. Repairing your own credit, for example, is often amazingly time-consuming.

Deceivers
Unfortunately, "credit repair" has become a dirty word in some circles. It's with great regret that we must admit that the bad rap has been, to some degree, deserved. In the early nineties, credit repair was a hot bed of fly-by-the-seat-of-your-pants, here-today-gone-tomorrow business. Many credit repair operations launched willy-nilly into offering quick fixes to credit problems. Some shouted from the rooftops that any type of negative credit, either accurate or inaccurate, could be removed with the snap of their fingers. Others claimed to have super-secret computer disks that would penetrate the credit bureau databases and mysteriously clear off bad credit listings. Still others offered to forge a new identity for any consumer who had destroyed their reputation. These dishonest fraudsters drew the ire of credit bureaus and regulatory agencies and kicked off an era of bad blood between consumer advocates and every credit correction enterprise that could even loosely be deemed a "credit repair" operation.

A good example of bad credit repair is ICR/NCR (National Credit Repair), a skunky credit repair multi-level marketing company that worked its way to the Inc. 500 list in 2001. NCR's founder, Bernie Pavone, invented a compelling fairy tale to convince people that his company had a super-secret computer program that could hack into the credit reports and remove virtually anything. ICR/NCR wasn't quite so bold in revealing to their marketers that Bernie had purportedly spent twenty-one months in federal prison for counterfeiting and credit card fraud.

In marketing videos, Bernie crooned on and on about how their special computer program "searches for erroneous information and forces the credit reporting agencies to correct or remove them. There's not a program on earth like this. It's the only one of its kind." All the while, NCR was sending out the simplest of dispute letters. There was no secret computer program and the FTC pointed out that it wasn't "insured by Lloyd's of London for $15 million" as the company claimed. Rather, ICR/NCR was just another dispute mill sending out form-letter disputes.

In 2003, hungry class action attorneys dug into ICR/NCR and forced them into a multi-million dollar settlement under the Credit Repair Organizations Act by accusing Pavone and his associates of exaggerating and lying about their credit repair services. ICR/NCR relented and settled with the class action lawyers only to be hit at the same time by the Federal Trade Commission, who bled the company of the last million dollars of its profits. ICR/NCR and Bernie Pavone, now penniless, drifted away into the sordid history of credit repair.

Without the ability (or even desire) to separate the good from the bad, many regulators threw up their hands and gave up on all forms of credit correction, assuming that anyone who would dare help consumers speed their credit recovery must somehow be hurting the system. Little by little, the establishment is coming around to see the value of legitimate credit repair, but the dirty legacy of the years of credit repair deceivers still muddies the waters of the credit correction world.

Discounters
As laws were passed and credit repair became an accepted, regulated industry, it became apparent to many that the best person to offer credit assistance might be a licensed attorney at law. Since attorneys were already regulated by state supreme courts and respected counselors to so many Americans, it made sense for those same Americans to...


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Credit Revolution: Path of the Smart Consumer 2007 John C. Heath, Esq., Dr. Randy Padawer, Jayson R. Orvis. All Rights Reserved. Published by Far Cliffs Multimedia, LLC

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