Very little is known about these companies. But there is a little comment about the advantages and disadvantages of credit repair companies, for a better interest. The truth is that in Mexico they started their activity in 2009, hosting a model from the USA.
The name given to this kind of business is “debt negotiation,” or debt repair, of course for customers. The main objective is to help people who cannot pay their debts with banks. It is done through a negotiation, but not requesting another loan, but with own resources.
It begins by making a programmed saving, while the repair company is in charge of negotiating the debt. This takes a few months, but at the time of reaching an agreement, with debt discount, you can cancel with the savings.
Advantages of credit repair companies
- For the technology handled, the information in each case is confidential and only the client has the personal information.
- According to the reports acquired, the negotiation agreements made can reach up to 70% discount. This depends on the creditor.
- Savings habit is created, as the client’s budget is programmed monthly. Thus, the settlement of the debt is reached, in agreement with the bank.
- As there is cancellation of debts, the credit history will be improved, in terms of rating.
- The savings account does not open in a bank, but is made in a Sofipo, an insurer, or investment fund. So that each of the securities owed is not directly discounted.
- The account balance is withdrawn when the payment agreement is reached with the creditors.
Disadvantages of repairers
- Not all debts can be negotiated, only the one with a balance greater than $ 35,000 pesos.
- Of course, the mortgage loan must be late in payments.
- It improves the history, but does not leave the credit bureau, but is left with code 97.
- Any negotiation by the repair company has a commission according to the amount of the debt.
- Not all banks conduct negotiation through credit repair companies.
- They are not financial entities, nor does it have control of ConSave Finance, therefore, they produce doubts and distrust.