Use of a credit repair company and attaining a mortgage

Hey all! A small part of what my consulting company (in Illinois) is going to provide will be assistance in cleaning up their credit. However, I have heard from a few different sources (albeit not 100% reliable), that if a potential home buyer hires any type of company to repair their credit on their behalf, they cannot get a mortgage. Can someone shed some light on this for me? Perhaps a link or two directly referencing this rule, if it exists? It’s not a huge portion of my business model by any means, but if this will prevent them from getting a home, I need to re-evaluate how to help them in this area. Thanks!

What do you mean by “repairing credit?” If you’re talking about strategically defaulting on money owed to other people, I know I wouldn’t give them a loan either.

There are ways to prevent this, like Dave Ramsey’s system.

You can have a company clean up your credit and still get a mortgage. What you can’t have is a company that will do that bill management clean-up junk where you pay that company and that company pays all your b ills for you. Those type that are designed to get companies take less than you owe on debts. Creditors look at them the same as bankruptcies. I used a company to clean up my credit when I started 5 years ago or so. What that company did was told me how to pay what credit to start up and how to pay the bills to get maximum score. I did the work myself and the score went up and I got 9 or 10 mortgages right after that was done.

If the people have a decent down payment, maybe you can hook them up with a private money lender or you can be their PML instead. I heard Phill Grove say something about this and the way you’d go about it is to get the property under contract, have the buyer sign saying they’ll pay what you’re selling it to them for, with a balloon pymt at the end of ‘x’ yrs (5-10) so that way it’ll be like they’re “renting to own”.