Legal History — Tour Stop 2 of 5

The Credit Repair and Credit Score Optimization industry has passed through multiple stages of maturity. In the early days of credit repair, as credit reports became more prevalent and consumer awareness grew, scam operations took advantage of consumers' naivety by promising new or perfect credit files for a large fee.

External oversight of the industry arrived in 1996 with the passing of the Federal Credit Repair Organizations Act. In parallel, FICO scores were endorsed in 1995 for use in automated underwriting, and overnight credit scores became essential components in all risk-based lending. These events provided for the expansion of the first legitimate credit repair firms: organizations that provide an automated platform for generating dispute letters credit report tradelines with the credit bureaus.


The current evolution of the industry shows trends toward professional, fully consultative credit management and optimization services for consumers and the mortgage industry. Efforts are underway to organize the credit optimization industry and provide internal oversight.

The true value proposition has evolved from automated "credit report repair" to a focus on empowering consumers and facilitating better mortgage loans and other financing.



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