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Myth No. 6 – Some people believe that a poor credit report can be off-set by building new credit.

 

Even one negative item on your credit report can have serious negative consequences. In today’s computer world, the decision to approve a new loan is rarely made by a human being. Your score is determined by a computer program.  One negative item can send interest rates soaring.

 

You can have a small amount of negative credit a year or two ago. The last year or two has been great. A couple of those older accounts, regardless of how much good credit you now have, may cause you to be declined for additional credit, make you pay higher interest rates and waste thousands of your hard earned dollars.

 

Myth No. 7 – Credit bureaus are part of the government and are unquestionable.

 

The credit bureaus are in business to make an impression on their stockholders since they are publicly traded companies. They are NOT agencies of the government. In fact, the industry is one of the most heavily regulated.

 

It has recently been revealed in a survey by an independent group, that over 70% of all credit reports have an error on them.  Due to the prevalence of mistakes, consumer protection legislation has been drawn up which allows the consumer the right to challenge the bureaus and force them to remove any incorrect data, information that is out-of-date or data that cannot be verified.

 

Myth No. 8 – It is against the law for creditors to remove a negative-listing on my credit record. Negative-listings are required by law to remain on the credit report for at least seven years.

 

When talking to collection agencies, credit grantors OR the credit bureaus, keep in mind that you can expect to be given all kinds of quasi-legal drivel by people who are over worked and under trained. The law states that negative information must be removed after seven years.  It sets a maximum, but not a minimum.  The credit bureau can remove an item whenever it suits them.

 

Myth No. 9 – Many people share a belief that by getting a federal tax ID or altering a few numbers of their social security number, a new credit file will be created.

 

It’s extremely difficult to create a new credit file by this scheming, not to mention illegal, activity. A lot of people do it, but a lot of people also get into big trouble for doing it. This is not something that you want to do.

 

It might have worked 10, 15 or 20 years ago. But because of all the computer linking systems now, giving fraudulent information on a credit report is nearly impossible to get away with, let alone the fact that it’s a criminal offense.

 

It’s in your best interest to hire adequate representation. Face the music and confront the credit bureaus, armed with the rights that Congress has granted you through the consumer protection laws.

 

Myth No. 10 – Credit counseling services can help you restore your credit.

 

Credit counseling services are agencies that are set up to help you renegotiate your credit cards and other debt. They put you on a budget and you make one payment to them. They in turn pay all the bills for you.

 

People who are in debt or who are trying to avoid going bankrupt can seek help from these nonprofit consumer credit counseling services. (CCCS’s) However, these companies are controlled and funded by the credit bureaus and the credit grantors, like the big credit card companies. They actually fund these agencies.

 

Your creditors will usually make a note on your credit report if you’re working with one of these consumer credit counseling services. Potential credit grantors are scared off by this almost as much as a Chapter 13 bankruptcy. Some of the worst credit reports out there have been participants in a credit counseling service or similar program.

 

I hope that by reading this a lot of the myths regarding credit repair that you may have believed have been dispelled.

 

There IS something you can do to repair your credit, establish new credit and have a new life.

 

Please call Warren Whitaker @ 972.523.8353 for a complimentary credit consultation and let’s get you back into the driver seat.

 

 

 

Resources

Credit Reports, Credit Scores, Identity Theft Protection from Equifax

Credit bureau – Wikipedia, the free encyclopedia

Credit Report, Credit Scores & Credit Checks | TransUnion

Credit Report and Credit Score with Toll-Free Support from Experian

Credit Bureaus and Credit Scoring | USA.gov

Credit Bureau Contact Information – Experian, Equifax, TransUnion

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