Are Subprime Lenders Now Credit Repair Organizations?

Credit repair organizations are in the business of assisting borrowers in improving their credit ratings. As banks and other lenders have gained control of the debt created by subprime lenders and lawmakers address the rules that led to this form of lending, subprime lenders have become a relic of the past. Subprime lenders made loans at high interest rates to bad credit borrowers. Some of these loans were seen as excessive in fees and charges.

Subprime Lending

Subprime lenders are not engaged in the same business as credit repair organizations. The lending concerns that arose in the mid part of 2000 that led to the brink of economic disaster in 2008 caused many lenders involved in subprime lending to go bankrupt. The subprime lending market has been and will continue to experience reform and regulation as lawmakers look to avoiding the conditions that caused the economic downturn.

Due Diligence Efforts

A credit repair organization that was a subprime lender (if such exist) should be scrutinized in order to determine the extent of its subprime lending activities, the amount of debt it created and any customer complaints that may have been filed against the company. This due diligence should be conducted of any credit repair company in order to protect the interest of the consumer.



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