Credit Repair Fraud

Okay that last entry was a like poking a hornet’s nest. Allow me to clarify, there is absolutely nothing wrong with deleting erroneous information from your credit file/credit report. And that process is fairly simple; few people need to pay hundreds of dollars to achieve correcting a minor mistake. All that is required is to simultaneously send a cover letter to all three repositories and a copy of the proof that clearly shows the mistake. Information on how to do this will be included in my new blog on credit issues and it is free for the taking!

Here is the part from the last entry that created the stir:

All of the credit repair companies that have approached me over the past three years instruct their clients to dispute accurate information on their credit report. Knowingly disputing accurate information on the credit report is intentionally conveying false information with the intent to alter the content of the report in order to be approved for a mortgage.

Those are my words and no one else.

Hey everyone, this is not a rumor, I am sharing what the representatives from credit repair companies have said directly to my face. They instruct their clients to dispute everything including information that is accurate but negative in nature. Everyone should know by now that credit scores are an integral part of the mortgage underwriting process. They can also impact the interest rate the borrower receives. Anyone that knowingly lies to or deceives the credit bureaus to improve their credit rating in order to get a loan or a better interest rate is guilty even if the deception is only an omission of accurate information.

If there were a deduction on your pay stub for payment of a judgment, would it be wrong to white-out the information and provide the altered document in order to get a loan? Of course it would be wrong. This is the same as having the credit bureau remove negative information that you know is correct. Both are omissions of facts.

Here is my stance on this subject, there is absolutely nothing wrong with managing your credit file and therefore your credit report. However, there is nothing right about manipulating or causing false information to be delivered to a lender considering a loan application.

But do not take my word for it, you can find the following information on the FDIC’s web site:

§ 1344. Bank fraud.
Whoever knowingly executes, or attempts to execute, a scheme or artifice--
(1) to defraud a financial institution; or
(2) to obtain any of the moneys, funds, credits, assets, securities or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises;
shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
[Codified to 18 U.S.C. 1344]
[Source: Section 1344 added by section 1108(a) of title II of the Act of October 12, 1984 (Pub. L. No. 98--473, 98 Stat. 2147), effective October 12, 1984, as amended by section 961(k) of title IX of the Act of August 9, 1989 (Pub. L. No. 101--73; 103 Stat. 500), effective August 9, 1989; section 2504(j) of title XXV of the Act of November 29, 1990 (Pub. L. No. 101--647; 104 Stat. 4861), effective November 29, 1990]