Credit report repair myths. The truth about cleaning up your credit report and boosting your FICO score and credit report score. Avoid these 13 most common credit repair myths!
You may have heard stories about credit report repair and how credit repair works. Don't be fooled by misinformation.
Credit repair is not hard and the very best way to improve your credit report score is to do it yourself.
Let’s take a look at 13 of the most common credit report repair myths, you'll come across and examine them all in detail.
Myth #1: There are negative listings, such as bankruptcies and foreclosures, that are impossible to remove from the credit report.
There's no type of negative credit listing that can't be removed from a credit report by you. Negative items, such as bankruptcy or unpaid debts, are certainly more difficult to remove from the credit report, but this has more to do with the operational systems of the credit bureaus than with the severity of the bad credit item.
For example, judgments and tax liens are severely negative listings, yet are easier to remove.
Myth #2: If I build enough good credit, it will offset my bad credit and make me credit worthy.
Because, I was only late a couple of times. Any amount of bad credit is devastating to your chances of being approved by a credit granter. Most credit grantors never actually look at your credit report. A computer pulls your credit report, rates your credit standing, indebtedness, and stability, then spits out an acceptance or denial.
Even one or two slow payments will usually trigger a credit card or personal loan denial. The slightest amount of negative credit will cause the interest on an auto loan to skyrocket. You will probably find that even a little bad credit, regardless of how much good credit you have, is an unacceptable barrier to credit approval on request for large amounts of credit - like a mortgage loan.
Myth #3: After you pay off a debt, it disappears from your credit report.
A credit report shows the whole credit history. All debts - even if they're paid off - are included. Negative credit information can stay on your report for 7 years. A bankruptcy can stay for 10 years.
Myth #4: If I declare bankruptcy, I can begin my credit report all over with a clean slate.
Many bankruptcy attorneys do not adequately understand or explain the effects of bankruptcy to their clients. When you file for bankruptcy, every credit account that you decide to include in bankruptcy will become an included account.
Additionally, a bankruptcy filing and bankruptcy discharge listing will appear in the court records section of your credit report. Because so many negative items are attached to the bankruptcy, it becomes difficult to remove all traces of the bankruptcy. If at all possible, you should avoid bankruptcy at all cost it makes credit report repair easy.
Myth #5: You can pay less than the minimum payment without penalty.
Unfortunately not. You must send in the minimum amount required by the due date or the creditor may consider your payment late and charge additional fees. The creditor may even report it to a credit bureau.
Myth #6: When I pay off a past-due account, such as a charge off or a collection account, it will show "paid" and will no longer be negative.
It is quite difficult to restore your credit without somehow satisfying your outstanding debts. However, paying an outstanding, delinquent debt you will change the account status to paid collection, paid was late, or paid was charged off - which will still stand out as a very negative credit report listing.
You need a credit report repair system because sometimes paying off a debt will actually hurt you. Because these types of collection accounts are allowed to stay on your credit report for a maximum of seven years.
When you have outstanding debt, it is almost always prudent to seek professional credit repair help so that you may settle your debts while creating a reasonable possibility of deletion of the negative listing at the same time.
Myth #7: If I succeed in deleting a negative item, it will just come right back on my credit report.
The credit bureaus have cleverly spread this myth through the news media and government agencies. In truth, the credit bureaus will often temporarily delete a negative listing if they haven't heard from the credit granter after approximately thirty days. If the credit granter reports late, say after six weeks, and then verifies the negative listing, the credit bureau will often reinsert the negative listing on the credit report.
This is often known as a soft delete. Usually, though, the creditor simply fails to respond and the negative listing is permanently deleted. If the item is verified by the credit granter, either before thirty days or after, the account may still be challenged again at some future time.
Myth #8: Requests or Inquiries for credit reports can't hurt my credit score.
At the end of each report will be a log of all inquiries into your credit report. An inquiry notation is made each time someone requests a copy of your credit file from that credit bureau. Every company that receives a copy of your credit profile will be listed under this inquiry section of your credit report.
Lenders don't like to see a lot of inquiries on a credit report. Excessive inquiries can result in a credit denial as easily as bad credit. But, not all inquires are viewed negatively.
Myth #9: A divorce decree separates joint accounts.
Divorce does not cause anything to happen automatically in your credit report. To protect your credit rating, pay off and close all joint accounts, then reopen new accounts as a single account owner.
Myth #10: Credit repair is too complicated to do myself. I would have to hire an attorney.
In some cases involving a difficult situation, an attorney can be of great assistance. An attorney can also help with clarifying the finer points of your state's laws.
However, you can accomplish most if not all of the legal and negotiation based methods yourself.
Myth #11: If I get in debt too deep, I can just file for bankruptcy protection.
The bankruptcy laws are changing to make it more difficult to eliminate all your debt in a bankruptcy, so you may end up paying much of it back anyway. It will also be on your credit report for 10 years! It's much better to settle the debts if you can.
Myth #12: There's nothing I can do about it now. My credit is destroyed forever!
As long as you work, you can rebuild your credit. You'll eventually get your debt and credit under control. Rebuilding your credit means:
Myth #13: Credit report scores take seven years to improve.
You can improve your credit score, starting today.
If you have a bad credit history, it can (and probably will) cost you tens of thousands of dollars more in higher interest payments over the life of a loan. Because you'll be charged much higher rates than you would be with a good credit rating. In almost every case you will be able to improve your credit score. You can easily repair your credit, yourself.
As they say, Knowledge is power. Many times people either act on false information or fail to act because they didn't know what they themselves could do.
If you choose to do your own credit report repair - there are some very good credit repair ebooks available that will walk you step-by-step through the entire credit repair process.
But the credit bureaus, credit repair companies and lawyers want to keep this credit report repair process a secret.
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Disclosure: I am an independent Credit Repair Cloud™ Affiliate, not an employee. I receive referral payments from Credit Repair Cloud. The opinions expressed here are my own and are not official statements of Credit Repair Cloud.