Lexington Law Review - Will Credit Repair Work For You?

I recently hired Lexington Law Firm to help fix my credit and do credit repair. Are they good and can you please review them?

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Bill's Answer: Answered by Daniel Cohen

Since first writing our review of Lexington Law and evaluating their services in particular, and credit repair more generally, we received hundreds of comments from clients and consumers.

There is nothing any credit repair organization can legally do for you — including removing inaccurate credit information — which you can’t do for yourself, for free. However, you may decide it is worth paying an organization to take care of these matters for you. The fees can be substantial, ranging from hundreds to thousands of dollars.

The Credit Repair Organizations Act (CROA), a federal law, prohibits credit repair organizations from taking consumers’ money until they complete the services promised. It also requires such firms to provide consumers with a written contract stating all the services to be provided and the terms and conditions of payment. Consumers have three days to withdraw from the contract.

Credit repair is not effective for current, unpaid debts. Even if current debts fall off a credit report, they will reappear at the next reporting period. You need to get out of debt before seeking to remove a debt from your credit report.

 

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Credit Score Before and After

Lexington Law Review

The activities of credit repair companies are constrained by the Fair Credit Reporting Act (FCRA) and the Credit Repair Organizations Act (CROA). Bills.com is not in a position to be able to verify whether Lexington Law Firm complies with these and other federal and state laws and regulations. Educate yourself about credit repair and the CROA before proceeding.

Under the FCRA, if a consumer credit reporting agency receives what it (in its opinion) deems as a frivolous challenge, then that credit reporting agency can ignore the request. Credit repair companies cannot guarantee success because creditors have such a large influence on what appears in a credit report. Also, the credit reporting agencies deal with so much data, it is a mix of art and science for a person or credit repair company to change or delete a listing on a credit report.

Lexington Law has been in business for quite some time. Any company with many clients over a number of years, such as Lexington Law, will generate complaints on consumer Web sites where readers claim the company is a scam. Of course, each consumer needs to do their own homework.

Tip Lexington Law Firm cannot get you out of debt. Contact one of Bills.com’s pre-screened debt providers for a no-cost, no-hassle debt relief quote.

Letter of Deletion

Use a letter of deletion to request the removal of inaccurate information from a credit report. A sample letter of deletion is below, and we include instructions for how to submit it online at no cost.

No one can remove accurate and timely negative information from a credit report legally. The law allows you to ask for an investigation of information in your file that you dispute as inaccurate or incomplete. There is no charge for doing this on your own. If you paid the accounts in full and as agreed, then you can try to get them removed.

Following up with the credit bureaus might be a time-consuming proposition, depending on how many items you want to be removed. To get these items removed from your credit report you have two options:

1. Pay For The Services of a Credit Repair Firm

Lexington Law Firm is one of many a credit repair companies. Be careful about the firm that you choose and make sure that it is a reputable firm. Check with the Better Business Bureau to learn about the performance of a particular company. Do some research on the firm you will eventually do business with. By law, credit repair companies must give you a copy of the “Consumer Credit File Rights Under State and Federal Law” before you sign a contract. They also must give you a written contract that spells out your rights and obligations. Read these documents before you sign. The law contains specific protections for you. For example, a credit repair company may not:

  • Make false claims about their services
  • Charge you until they have completed the promised services
  • Perform any services until they have your signature on a written contract and have completed a three-day waiting period.
  • Suggest you mislead credit reporting agencies about your accounts or alter your identity to change your credit history

Your contract must specify:

  • The payment terms for services, including their total cost
  • A detailed description of the services to be performed
  • How long it will take to achieve the results
  • Any guarantees offered
  • The company’s name and business address

2. Do It Yourself

Bills.com offers a debt self-help center that can help you solve your debt problems on your own for free. Step one is to obtain a copies of your credit reports from the three largest consumer credit reporting agencies. Go to AnnualCreditReport.com for no-cost, no-gimmick copies of your credit reports. Alternatively, call (877) 322-8228, or write to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. You may order your reports from all three nationwide consumer reporting companies at the same time, or you can order your report from each of the companies one at a time.

Check your reports for the action items. The three biggest bureaus allow consumers to dispute items online, but in most cases you will need a copy of the respective report and other information to do so. Once you are ready, contact the bureaus reporting the incorrect information:

Equifax Experian TransUnion
Dispute errors with the consumer credit reporting agencies directly. Source: Bills.com
800-685-1111 888-397-3742 800-916-8800
Equifax.com Experian.com TransUnion.com
File a credit dispute online at Equifax File a credit dispute online at Experian File a credit dispute online at TransUnion

Sample Letter of Deletion

Tell the consumer reporting company, in writing, what information you think is inaccurate. Include copies (not originals) of documents that support your position. In addition to providing your complete name and address, your letter should clearly identify each item in your report you dispute, state the facts and explain why you dispute the information, and request that it be removed or corrected. You may want to enclose a copy of your report with the items in question circled. Your letter may look something like the following:

FTC Sample Letter of Deletion
Sample Letter of Deletion. Source: FTC

Date
Your Name
Your Address
Your City, State, Zip Code

Complaint Department
Name of Company
Address
City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute the following information in my file. The items I dispute also are encircled on the attached copy of the report I received.

This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information.

Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please investigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.

Sincerely,

Your name

Enclosures: (List what you are enclosing)

Conclusion

Credit repair will not erase or cancel unpaid debt from your credit reports. Clear your debts before trying credit repair.

Follow the steps above to dispute incorrect information on your credit reports. If the provider reports the item to a consumer reporting company, it must include a notice of your dispute. If you are correct — that is, if the information is found to be inaccurate — the information provider may not report it again.

Some Web sites provide kits for as little as $13.95 that contain letter templates and tips to help you repair your credit yourself. You can learn more about credit, credit scoring, and credit repair at Bills.com.

Generally we do not believe that firms like Lexington Law, Ovation Law, and other credit repair industry leaders are scams, even though they do have lots of complaints about them on consumer-complaint Web sites. Be sure to evaluate each company’s complaint volume against the size of its overall client base. Do your homework to ensure the monthly fee seems reasonable to you for the services promised. Many of the unhappy people who comment below failed to do their homework, and as a result were disappointed.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

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Comments (565)


Tim P.
Center, PA  |  April 15, 2014
My school loans from 2005 are still on my credit report totalling $35,000+. I haven't paid on them since 2006. I want to pay them off but I am tired of them being on my credit report after all these years. I've read that after 7 yrs they must remove it from my Credit Report. I don't have anything else on my Credit Report but minor stuff that are payed or being payed. Should I use a credit repair service to have them removed from my credit report? Will that cause my credit score go up? Thank you,
Bills.com
April 16, 2014
How long your student loans will remain on your credit report depends on what kind of student loans you have. For example:
  1. If you have Perkins federal student loans, they will stay on your credit report until you pay them off.
  2. Federal Direct and FFEL loans remain on your report for 7 years from the date of default or the rehabilitation date.
  3. Private student loans can remain until 7 years from the date of first default.

I don't recommend hiring a credit repair company to remove legitimate derogatory information. Check your credit report to determine the date of default. If the debts are private student loans, look into the statute of limitations on debt, to see if you can avoid paying if they decide to pursue collections

M. E.
Columbus, GA  |  April 11, 2014
After an arduous 3 yr climb out of debt and bad credit I have only 4 bad accounts left totaling a little less than $5K...still a little ways to go but Yay! still.

The 4 accounts have proven resistant to my efforts; 1 does not even belong to me and the other 3 are grossly inaccurate. All 4 report incorrect amounts and PLUS the 'opened date' as the current month and year so it looks like it just happened; the clock never has a chance to start. Isn't this illegal because items to do 'roll off' after 7 years right? What should I say in subsequent letters because nothing I've tried so far has worked. Should I look for a repair agency?
Bills.com
April 11, 2014
There is nothing the credit repair companies do that you can't do yourself. In a situation like yours where it appears a collection agent or two is abusing the credit reporting system by reporting current dates of first delinquency, credit repair is not enough.

Instead, consult with a lawyer who has experience litigating Fair Credit Reporting Act (FCRA) violations. Your lawyer will start by sending a sternly worded letter to the three consumer credit reporting agencies (Equifax, Experian, and TransUnsion) and the collection agents reporting the false information. If that's ineffective, then he or she will launch a lawsuit or lawsuits against the CRAs and the collection agents.
Jennifer R.
Bend, OR  |  March 10, 2014
Bill, I had a charge go to collections on 2-28-2014 and it states that the original delinquent date is from 2008. I had to call the collections agency to find out the original creditor. They stated that it was US cellular. I then Called US Cellular to see about the charge and they have no record of me in their system. I then contacted the collections agency by phone to let them know that I would be disputing the charge. They stated that my account would be put on hold for 21 days while I filed the paperwork. Two days later they reported to a second credit reporting agency. Can they do that if my account is on hold? Should I dispute with the credit reporting agency or the collections company? And should I have US Cellular send me a letter stating that they have no record of me? Thanks Jennifer
Bills.com
March 27, 2014
Sadly, there is no law preventing collection agents from selling accounts upon which a consumer has filed a debt validation letter. It can be like the game Whack-A-Mole, but without the fun.
Jon M.
Seattle, WA  |  February 20, 2014
I had a home that foreclosed in early 2008. The financing involved two loans (an 80/20), both financed by Wells Fargo. The 80%, main loan, shows 'foreclosure, settled-less than full balance' and a note says estimated month and year the item will remove is 04/2015. That's not my concern. My concern is the 20% loan. It shows as a charge-off but it shows an outstanding balance and an amount past due - shows that I'm late. Each month since May 2008 shows that I'm delinquent. I disputed this saying it shouldn't show as past due with an outstanding amount, yet it stayed. Is this how this 20% loan should appear on my credit reports? If not, should I do something more or leave it alone as it seems disputing it causes more harm as it starts a 'new clock' or something. Just not sure how to handle this....
Bills.com
February 21, 2014
Filing a dispute with one of the big-three consumer credit reporting agencies does not reset the FCRA 7-year clock. The FCRA's rules for when the 7-year clock starts are specific and clear: The 7-year clock starts with the date of first delinquency. The second mortgagee here violates the FCRA if it resets the 7-year clock with each passing month.
Sam S.
Roanoke City, VA  |  February 20, 2014
If I filed bankruptcy and have derogatory marks from before bankruptcy do I have to wait 7 yrs for them to fall off?
Bills.com
February 21, 2014
A successful bankruptcy will discharge qualified debts. It will not erase information about delinquencies from your credit report. In other words, the 7-year rule still applies.

An account shown on your credit report that has its balance discharge discharged in bankruptcy will contain a notation that reads something like, "balance discharged in bankruptcy."
Anne S.
Scott, MN  |  February 10, 2014
I have a creditor who sent me to collections, and then the collection agency has brought a judgment against me. On my credit report, I now have the creditor showing a charge-off plus a separate judgment from the collection agency. Is this correct? Aren't I being hit twice for the same thing? As I read previously, just because the debt changed hands doesn't mean it can be reflect twice, correct? What do I do?
Bills.com
February 10, 2014
It depends how the debt is displayed on your three credit reports. There is no violation of the Fair Credit Reporting Act if it is clear what's published is a collection account's chain of ownership. However, if the information is published in misleading manner to suggest separate, independent collection accounts, then this action violated the FCRA.
Avatar
Anne S.
Scott, MN  |  February 10, 2014
Nobody looking at it would ever know they are connected. I know because I obviously know how it got there. So can I ask the bureaus to remove the charge-off? Or how do the get reflected as "connected?"
Bills.com
February 10, 2014
The consumer credit reporting agencies don't offer subtlety in their customer service. If there's an error in your credit report, you need to file a dispute and say something like, "The date should be 2004 and not 2008" or "This is not my account" or "The debt amount is $1,200 and not $12,000." Anything more complicated than the hypothetical examples I just shared will confuse the consumer credit reporting agencies. My advice is you file a dispute saying the oldest accounts are not yours, and hope for the best.
Mark A.
Bishop, GA  |  January 03, 2014
B of A just ignores my bankruptcy, still sends me bills, still reports "past due" on my credit. My lawyer is no longer under contract. Credit agencies just say, "contact B of A." I wish there was someone to watchdog banks and credit agencies. I was just denied credit because of open accounts, but they are not open.
Bills.com
January 03, 2014
File a dispute with each of the big-three consumer credit reporting agencies that publish the incorrect status information.
Tom W.
Yalesville, CT  |  December 24, 2013
I have a company called LVNV Funding on my credit report who has marked a couple of things as derogatory, however I believe they are from accounts that are older than the 7 year period that LVNV is trying to collect. How do I find out what accounts LVNV are reporting?
Bills.com
December 24, 2013
You may see a history of the derogatory in your credit reports dating back to the original creditor. If you believe the derogatories are older than 7 years, file disputes with the consumer credit reporting agencies that publish this information. You have credit reports published by Equifax, Experian, and TransUnion, and the information in each report may be different. Therefore, you may need to file one, two, or three separate disputes depending on where the inaccuracies appear.
Greg P.
Richmond, VA  |  December 17, 2013
What do you do if you have disputed a tax lien that is not yours, twice, and been denied (Experian)? FYI: Equifax deleted the incorrect information from my report within two weeks, and then it dropped off of my TransUnion report. Somebody at Experian is not doing their job.
Bills.com
December 17, 2013
Read the Bills.com article 5 Steps to Take to Remove False Information From Your Credit Report to learn what to do if disputing incorrect information does not succeed the first time you dispute it.

Also try reaching out to Experian via Social Media. They may be responsive to an issue raised on their Facebook page or their company Twitter feed.
Willi J.
City Of Norfolk, VA  |  December 13, 2013
When you dispute an item on your credit report, does it show up as a negative mark on your credit report? Does disputing an item on your credit report show up at all on your credit report?
Bills.com
December 13, 2013
Disputed information appears on your credit report during the time of the dispute.

Under the Fair Credit Reporting Act, "If a consumer reporting agency (Equifax, Experian, TransUnion, or other) is notified pursuant to section 623(a)(3) [§ 1681s-2] that information regarding a consumer who was furnished to the agency is disputed by the consumer, the agency shall indicate that fact in each consumer report that includes the disputed information." (15 U.S.C. § 1681c(f)

In other words, information a consumer disputed must be marked or notated as disputed on their credit report(s). If the information is found to be inaccurate, it is corrected and then no longer flagged as disputed. If it is found to be accurate, the dispute notation is removed.

Generally, FICO and VantageScore ignore information marked as disputed — it counts as neither a positive nor a negative in a credit score. Therefore, disputing a derogatory provides a temporary boost to consumer's credit score.

Information marked as disputed is not removed from a consumer's credit report. A lender can still see the disputed derogatory. Some lenders will refuse to lend to a consumer with disputes on their credit report because the dispute or disputes inflate the consumer's credit score to what may be a misleading number.
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