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Originally Posted by lovelylanie2
Hello, I'm wondering has anyone ever used a credit repair service like Lexington Law? If so, did it work or did you see some improvement?
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There is nothing that Lexington Law does that you cannot do yourself.
Note that credit repair is very dangerous to you financially, if you don't know what you're doing.
You have to understand why things are the way they are.
There is not now, nor has there ever been, any State or federal law that compels any creditor or debt collector to report credit information. Credit reporting is a purely 100% voluntary activity.
But, credit reporting is not free. It costs money. A lot of money. $10,000s to $100,000s per year.
Ever been in a gas station or store that has a sign saying, "
No credit card purchases under $10"?
That's because credit card services are a subscription-based service. The vendor's annual fee is based on sales volume. At high volume, you start getting discounts on the fees, but at low volume, you pay through the nose to use the credit card services. A credit card charge for $10 or less results in the vendor losing money. Note that you also pay more for goods and services, for the convenience of using credit cards.
Well, credit reporting is like that. It's a subscription service that you subscribe to just like you subscribe to Hulu or NetFlix or cable or cell-phone or Ancestry.com.
The most basic subscription service is account access and your annual subscription fee is based on the number of accounts you access in a given year. Your local furniture or appliance store might have basic account access, and while you bought furniture on credit, they don't report your credit information, because they do not subscribe to that level of service, because it costs more.
Also, note they probably only subscribe to one credit reporting agency, instead of all three, because it costs more. You pay an annual subscription fee to each credit reporting agency (TransUnion, Equifax and Experian).
The next level of service, which costs more, is the ability to access accounts
and report credit information, which many creditors and debt collectors have.
There's another service you can subscribe to, and that is account monitoring. Most creditors do not subscribe to account monitoring, but many debt collectors do.
Account monitoring works like this:
any activity on your credit account triggers an e-mail alert to the debt collector that activity has occurred.
That activity may be a hard inquiry, a name change, an address change, a phone number change, a credit dispute or a new account, whether it's a credit account or a debt collector account.
That's where the danger lies.
You apply for new credit, it creates a hard inquiry which generates an e-mail alert to the debt collector, and as far as they're concerned, if you have money for new credit, then you have money to pay your debts.
You may start getting collection notices or telephone calls,
or they may file a law suit against you to collect a debt.
If you do not want to be sued, or if you can't deal with a law suit, then you should not apply for new credit, or dispute accounts on your credit report or take any action that will result in a change in your credit account.
What I always recommend to people is that they wait until the Statute of Limitations has expired on the debts and then engage in credit repair.
If people do that, then if they are sued, they have an Absolute Defense.
There are people who know how to deal with debt collection law suits, and for those people, I tell them full-steam ahead.
If you intend to engage in credit repair, then you should look at the Statute of Limitations for the debts that you have.
I had one person whose debts were mostly out-of-Statute, except one which was only a few $100 and they were willing to take the risk on that small debt.
All States except Louisiana have adopted Article 2 of the Uniform Commercial Code (UCC).
The UCC Article 2 governs the sale of goods and the Statute of Limitations is four years.
It does not govern services.
How do you tell the difference between goods and services? What I tell people is if it has a color, or comes in quantities, or you can touch it, it's a good.
You cable and cell-phone do not have colors, or come in quantities and you cannot touch electro-magnetic radiation, so they are services.
Medical and dental services are, well, services.
So, your car that was repossessed is not a contract in writing, it is governed by UCC Article 2 and has a Statute of Limitations of four years. That also covers furniture and appliances, and a great many other things.
The UCC takes precedence.
Some States, but not all States, have adopted Article 4 of the UCC. That governs rental agreements and has a Statute of Limitations of four years.
So, no, the back rent you owe on your apartment is not a contract in writing, it is governed by Article 4 of the UCC.
The same holds for car leases.
It also holds true for furniture and appliance rentals, or equipment rentals.
For credit cards, the Statute of Limitations is 2, 4, 6, 8, 12 or 15 years, depending on the State, but you'll have to read the statutes and look at the case law to see how your State actually treats credit cards.
I have seen people successfully use UCC Article 2 for credit cards. In one case, the defendant demanded the plaintiff debt collector provide an itemized list of purchases to determine which were goods and which were services, and the debt collector threw in the towel and dropped the case. in the other two, the courts just flat out accepted it.
So, you need to examine your debts on all three credit reporting agencies, determine the Statute of Limitations, and decide whether you want to pursue credit repair.
The only other issue is the Statute of Repose.
For some States, like Ohio, the Statute of Limitations is also a Statute of Repose, meaning that once the Statute of Limitations has expired, the debt is wiped out, so there is no debt at all.
Say you had an auto repossession with a balance of $8,900. If the Statute of Limitations is also a Statute of Repose, then the balance is $0 and you can dispute that with credit reporting agencies so that the account shows a balance of $0 instead of $8,900.
Doing that will probably boost your credit score.
Quote:
Originally Posted by lovelylanie2
What about debt consolidation agencies. Anyone ever tried one of these and did it help as well?
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You can try that, but note that your creditors will show that on your credit report.
It will have the same effect as a bankruptcy, except it won't last for 10 years.
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