Fixers, Fix Yourselves

(NuTech illustration)

Consumers who struggle with loan payments often turn to credit-repair consultants that purport to improve consumers' scores by the credit-reporting companies Equifax, TransUnion, and Experian.

The problem is that some fixers employ illegal methods: [bold added]

In recent years, a government website has made it easier for people to file claims of identity theft so they can remove fraudulent accounts from their credit reports...These companies file false identity-theft claims on items that bring down customer’s credit scores, like delinquent credit-card debt, often without that person’s knowledge.

The move often removes that information from the consumer’s credit reports while the claim is investigated. The practice is known in the industry as credit washing, since a person’s credit reports can look better than they really are, at least temporarily, and so can their scores...

Naftali Harris, chief executive at SentiLink, a company that works with lenders to help stop identity fraud, said many lenders tell him that 80% to 90% of the claims they receive about identity theft are fraudulent.

More details on how identity-theft protections can be exploited:

When a person provides the required paperwork to Equifax, Experian or TransUnion stating that an unpaid loan or other negative information on a credit report is the result of identity theft, the companies in many cases must remove the information within four business days if they can’t verify it is legitimate. They and the lenders can continue to look into the claim, and later reinstate the account if it’s found to be legitimate. Meanwhile, the borrower is in a better position to apply for new loans from other lenders.

There are ethical companies in the credit-repair industry who do help those who suffer from identity theft.

Unfortunately, bad behavior (e.g., cryptocurrency, misleading "news" reporting, pharmaceutical claims, nonprofit politicking) have caused the public to distrust entire industries and institutions.