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!
(c) eBusiness Power
About the author:
Jim Eastman is the support contact for http://www.ErasingBadCredi
t.com. People wanting to repair their credit can visit the
site to sign up for a free mini-course on Credit Repair
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