Does credit repair help consumers become eligible for a mortgage or is it a scam?

If subprime is the current dirty word of the mortgage business, the next most unpopular, at least among insiders, is credit repair.

Terminology may appear secondary, yet it is important in conveying credibility, or not, especially in times of crisis.

Currently, the industry is updating the overall process of customer credit reporting. Experts highlight the need for accurate, forward-looking credit data gathering and reporting. Many describe it as credit proofreading, score optimization, or long-term credit improvement, all of which involve data reporting and financial credit profile knowledge, not illegitimate changes of borrower information or fraudulent credit repair. As a result, there is a lot of lender skepticism when dealing with imperfect credit profile clients.

"I want to make it clear that we believe there has been a large misunderstanding with regards to credit restoration and credit repair. We do not support credit repair, which is the manipulation of credit data and the covering up of legitimate information," said managing partner of Cogent Road, Alan Baia.

"What we're seeing is that brokers do not really understand credit scoring. They hear about credit repair and credit restoration. Often, credit restoration is the illegitimate manipulation of a credit profile with the sole purpose of hiding legitimate derogatory information. It often comes with a significant monetary cost to the customer and doesn't generate the results that the broker initiated the program for. So you end up with an unhappy customer. Most of all it is a purposefully and illegitimately manipulation of the customer's credit profile. We in no way support that."

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