Credit repair shops (commonly also known as “credit repair organizations” or CROs) are mass credit dispute operations. You have heard commercials for credit repair shops on the radio. You have seen them on television. Credit repair shops typically charge you upfront and monthly fees (or similar fee arrangements) to churn out and send to consumer reporting agencies (CRAs or credit bureaus) generic “dispute” letters that often do not meet the requirements of the Fair Credit Reporting Act (FCRA). Credit bureaus frequently disregard so-called “dispute letters” from credit repair shops. Still, you can bet you you will still be charged for the credit repair shop’s “services.”
Many consumers mistakenly believe there is some kind of magic formula for removing accurate negative status items from their credit reports. There isn’t. Nevertheless, countless consumers throw away money by paying credit repair shops to “fix” accounts that, while negative, are accurately reporting. Do not make that mistake. No reputable consumer credit law firm would accept a case on behalf of a consumer with accurate derogatory items on his or her credit reports (except in the very rare case in which an item may be technically accurate but materially misleading).
Sherman & Ticchio is not a credit repair shop. We are a consumer law firm founded and operated by experienced federal litigators who understand consumer law and litigate FCRA cases in federal court every day. Each case we accept is treated equally and receives our full and devoted attention. We do not charge fees for consultations and our clients do not ever pay Sherman & Ticchio any out-of-pocket legal fees. Our fees come from the proceeds of the case (i.e., our fees are a portion of settlement proceeds or amounts awarded at trial).
There are three major types of inaccuracies that often appear on credit reports:
- Mixed or merged files (when information from your credit file is mixed with information from one or more other consumer credit files).
- Accounts that are in your name but do not belong to you but are in your credit file (most often the product of identity theft).
- Status errors on your credit report (inaccurate reporting about an account that does belong to you).
All are potentially actionable under the FCRA. But accurate reporting of negative items is not actionable. Credit repair shops won’t tell you that. Instead, they will charge you month after month after month to send disputes about accurate items that you have no right to have removed from your credit reports pursuant to federal law. Credit repair shops most commonly deal with “status disputes.”
A “status” credit reporting error is the publication by a credit bureau of false information concerning your payment history for an account that legitimately belongs to you. For instance, Experian or Equifax or TransUnion may report that you were 30 days late paying your Amex bill when, in fact, you never made a single late payment. The error is known as a status error on your credit report because the credit bureau that reported the inaccurate data misrepresented the status of your account (i.e., incorrectly reporting that the “status” of your Amex account is that you made a payment 30 days late). Real consumer law firms — Sherman & Ticchio and many others — can help you with a legitimate status dispute.
Credit repair shops do not care whether or not you were indeed late in making your payments when they submit ineffective dispute letters to CRAs. Credit repair shops will tell you that they can help you fix your credit. They will smile. They are friendly. They rarely succeed in helping restore your credit. But they happily deposit your hard-earned money into their bank accounts.
Avoid credit repair shops. Whether it is Sherman & Ticchio or another member of the National Association of Consumer Advocates (NACA), consult with legitimate and reputable consumer attorneys for advice about how to best address your credit problems.