Credit Repair Myths Exposed

Credit Repair Myths Exposed


If you?ve done any searching on the Internet for information
pertaining to ?Credit Repair,? you?ve no doubt found that
there?s a great deal available. Unfortunately, there?s also
a lot of misinformation as well.

Let?s take a look at some of the most common misstatements
you?ll come across and examine them in detail.

MYTH #1 ?Credit repair doesn?t work!?

While it?s true that credit repair is more ?art? than
?science? that?s not to say it doesn?t work. If you
undertake to repair your bad credit score, there?s never any
guarantee you can restore it to ?perfect? status. But
sometimes you can, and in almost every case you can at least
affect some improvement in your credit score, and often
major improvement at that!

First of all, credit reports for the most part are filled
with errors. While there seems to be no general agreement,
it?s estimated that anywhere from 1/3 (Attorney General of
NY) to as many as 90% (Charles Givens Organization) of
credit reports contain errors.

Removal of erroneous negative information alone will go a
great way toward improving your credit score. But there?s
more to the story, which brings us to myth #2.

MYTH #2 ?Negative information that can be verified cannot
be removed?

This is one of those statements that are ?almost? true, but
taken literally is misleading. As is often the case, the
inclusion (or exclusion) of one seemingly small word makes
the difference in a truthful statement, and one that?s not
(or not necessarily) accurate.

Let?s take an analogy. Suppose it?s the middle of summer,
and your grass has grown unusually high. Let?s also suppose
that you own a lawn mower, it?s in good working condition,
and has plenty of gasoline in the tank.

Now let?s say that you?re sitting on your couch and say to
yourself ?My grass will get cut today because I ?CAN? go
outdoors anytime and cut it.?

So will your grass get cut? Not necessarily! Just because
you ?can? go outdoors and cut your grass doesn?t mean it?s
going to get done. You can repeat this statement to yourself
all day long, but your grass isn?t going to get cut until
you actually go outside and DO it!

Likewise, because a negative item on your credit report
?can? be verified doesn?t mean it will be. According to the
Fair Credit Reporting Act, a credit bureau must investigate
and verify ?within a reasonable period of time? any item in
your credit report that you dispute. If the ?information is
found to be inaccurate or can no longer be verified, the
consumer reporting agency shall promptly delete such
information.?

Now in this context ?can be verified? clearly means verified
by the credit bureau?s investigation of the item, and the
?reasonable period of time? has been established (by
subsequent rulings) to be 30 days. So if the credit bureau
doesn?t complete its investigation of the disputed
information within 30 days, or if for some reason the
creditor fails to respond and verify the information, by law
the disputed data must be deleted from your credit file.

MYTH #3 ?Credit repair agencies are all scams?

It?s true that there ARE a good many unscrupulous credit
repair agencies. But there are also some corrupt police
officers, lawyers, and politicians. Yet we don?t label all
members of these professions as ?corrupt.?

If you?re looking for help to repair your bad credit you do
need to be careful and do your ?homework? when selecting an
agency. There are many honest credit repair companies that
are not ?scams.? But beware of any who make promises as to
results!

As stated above, it?s not always possible to restore your
bad credit history to perfect status, and no one should be
making any promises to that effect. Beware of any company
that does! And while an agency will in all likelihood be
able to improve your credit score, if any agency makes this
promise, be sure it?s accompanied by a money back guarantee.
Otherwise, look elsewhere. And don?t forget to ask for
references and follow up on them.

MYTH #4 ?You have to hire a credit repair agency or lawyer
to fix your credit?

Going back to the analogy above, you can always hire someone
else to cut your grass (or to do just about anything else)
for your. And if fixing your own credit seems an
intimidating task, you might prefer to hire a credit repair
company to do it.

But it?s not really necessary that you do. First of all,
credit repair agencies aren?t cheap. You can expect to pay
anywhere from $2,500 to $5,000 or more. Plus, you?ll be
paying a high fee for something you can just as well do for
yourself, which brings us to myth #5.

MYTH #5 ?It?s too difficult or complicated to fix your own
credit?

A credit repair company isn?t going to do anything for you
that you can?t do for yourself! Credit repair isn?t rocket
science. It involves writing letters to credit bureaus and
to creditors. If you?re able to write a letter, put a stamp
on it and mail it, you?re able to repair your own credit.

?Given the proper knowledge, you can fix your own credit?

This statement IS true! You?re entirely able to repair your
own credit, given the proper knowledge. And given the proper
knowledge, you can fix your own car, repair your own
plumbing, or for that matter perform brain surgery.

While fixing your own credit is relatively simple and
straightforward, you do have to know how to go about it.
Essentially it involves getting a copy of your credit report
and writing letters to the 3 major credit bureaus disputing
negative information in your file.

But there?s a right way and a wrong way to do it. In fact
even some of the high priced credit repair agencies get it
wrong, which brings us to myth #6.

MYTH #6 ?You improve your credit score by getting all the
negative items on your credit report removed?

It?s possible to get all the negative items on your credit
report removed and actually see you credit score go DOWN as
a result! The reason? Your credit score depends on a number
of factors, one of which is the length of your credit
history. In some cases, you?re better off to NOT remove some
negative items on your report, especially if they involve a
few late payments in the distant past, but show timely
payments during recent years.


While the ?nuts and bolts? of credit repair is beyond the
scope of this report, there are a number of sources of good
information online. If you have bad credit, there are 3
major points you should keep in mind:

1. If you have a bad credit history, it can (and probably
will) cost you many tens of thousands of dollars in higher
loan interest over the years, as you?ll be charged much
higher rates than you would be with good credit. If your
credit is really bad, you may not be able to get a loan at
all!

2. The situation isn?t hopeless! In almost every case you
CAN improve your credit score. You can easily do it yourself
or find a reputable agency to do it for you. But in any
case, GET IT DONE!


3. If you choose to repair your own credit (recommended)
there are good books and eBooks available that can walk
through the process. Get hold of one and get started NOW!


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About the Author
Jim Eastman is the support contact for ErasingBadCredit.com. Anyone wanting to repair their own credit can get valuable advice by signing up for the FREE mini-course at http://www.erasingbadcredit.com.




Jim Eastman