Credit Repair Myths
There are many myths and misconceptions surrounding the concept of bad credit repair. In this article, we will dispel a few of the most common of those myths.
Myth 1: Credit repair companies are all ripoffs and scams.
Truth: There is no denying the fact that like any other industry, the credit repair industry is home to a few bad apples. There are some credit repair companies out there which will either take your money and simply not do what they say they will do, or they will attempt to fix your bad credit, but will do so using illegal tactics that could get you in serious trouble if you are caught.
However, there are also legitimate agencies out there which operate honestly and lawfully. If you are thinking about using a credit repair company, it is important that you recognize the signs of a legitimate credit repair company, and also the red flags that indicate when you should steer clear of a particular company. Although bad credit repair is entirely possible, you should maintain realistic expectations. Bad credit cannot be repaired overnight, and there is no guarantee that every single negative item on your credit report will be removed. So avoid any organization that promises you perfect credit overnight if you hire them! Simply put, any company that makes these promises is lying!
Also, when you are considering using a credit repair company, find out what tactics they use. They should only be disputing negative items on your credit reports in an effort to get them removed; they should not be using tactics such as giving you a deceased person’s social security number to begin using to apply for credit–as you might guess, this is illegal and will bring about serious consequences for you if you get caught.
Another thing you may want to look for is a money-back guarantee. Not all credit repair companies will offer this, and when they do certain conditions may have to be met before you can be refunded. A money-back guarantee gives the agency an added incentive to make sure you are satisfied with their services.
Myth 2: Negative items must remain on your credit report.
Truth: It is not surprising that this is such a widely held misconception; often when a consumer calls a creditor regarding a negative item on his/her credit report, the customer service representative will actually tell them that negative items cannot be deleted. Sometimes they will even throw in the words “by law”, as in “negative items must remain on your credit report by law”. Now whether they say this out of ignorance, or in an effort to discourage consumers from attempting credit repair, it is simply untrue. There are no laws requiring that any item, positive or negative, must appear or remain on one’s credit report for any length of time, or at all for that matter. The law says that certain items may appear on your credit report under specific circumstances, not that they must appear. Also, credit bureaus and creditors do have the ability to remove derogatory items from your reports with no worries of legal consequences, regardless of whether the negative item was correct or not. The law actually says they are not required to remove negative items which are being reported accurately; it does not say that they can’t remove such listings!
Myth 3: You must pay off all your collections and/or charge-offs if you want to repair your bad credit.
Truth: You may find this hard to believe, but making payments on old delinquent accounts can sometimes actually hinder your credit repair efforts instead of helping. The reason for this is that your recent payment patterns affect your credit score much more than delinquencies that occurred several months or years ago. If you have a delinquent account that you have not paid on in years, it is usually better for your scores not to make a payment on it. Doing so will cause your credit report to show a delinquent account with very recent activity, and this can be quite harmful to your scores. (An account that was charged-off or in collections will still appear as a derogatory item on your credit report, even if you pay it off completely. The fact that the account was ever in collections is what makes it derogatory.) All this is not to say you should ignore these items; they still must be resolved one way or another–it’s just that simply starting to make payments willy-nilly is not the best approach. If the debt is in the hands of a junk debt buyer or collection agency, request validation for the debt. If they produce proper validation, try to negotiate a pay for delete agreement before you pay so that the debt will be cleared from your credit reports entirely upon payment.
No related posts.
Filed Under credit repair | 8 Comments
Tagged With credit repair
Comments
8 Responses to “Credit Repair Myths”
Leave a Reply
[...] 1: Bad credit repair organizations are scams. Truth: Like any other industry, both legitimate and dishonest companies [...]
[...] 1: Bad credit repair organizations are scams. Truth: Like any other industry, both legitimate and dishonest companies [...]
[...] 1: Bad credit repair organizations are scams. Truth: Like any other industry, both legitimate and dishonest companies [...]
[...] Credit Repair Myths Dispelled April 23rd, 2010 | admin | 0 Comments » Myth 1: Bad credit repair organizations are scams. Truth: Like any other industry, both legitimate and dishonest companies [...]
[...] 1: Bad assign repair organizations are scams. Truth: Like some another industry, both straight and duplicitous companies [...]
[...] 1: Bad credit repair organizations are scams. Truth: Like any other industry, both legitimate and dishonest companies [...]
[...] Credit Repair Myths Dispelled June 6th, 2010 | admin | 0 views | 0 Comments » Myth 1: Bad credit repair organizations are scams. Truth: Like any other industry, both legitimate and dishonest companies [...]
[...] 1: Bad credit repair organizations are scams. Truth: Like any other industry, both legitimate and dishonest companies [...]