Credit Repair Myths Exposed by cmlang


									by: Jim Eastman

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

Lets take a look at some of the most common misstatements youll come across and examine
them in detail.


Credit repair doesnt work!

While its true that credit repair is more art than science thats not to say it doesnt work. If you
undertake to repair your bad credit score, theres 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, its 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 theres more to the story, which brings us to 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 thats not (or not necessarily) accurate.

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

Now lets say that youre 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
doesnt mean its going to get done. You can repeat this statement to yourself all day long, but
your grass isnt going to get cut until you actually go outside and DO it!

Likewise, because a negative item on your credit report can be verified doesnt 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 bureaus 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 doesnt 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.


Credit repair agencies are all scams

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

If youre 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, its 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 its accompanied by a money back guarantee. Otherwise, look elsewhere. And
dont forget to ask for references and follow up on them.


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


Its too difficult or complicated to fix your own credit
A credit repair company isnt going to do anything for you that you cant do for yourself! Credit
repair isnt rocket science. It involves writing letters to credit bureaus and to creditors. If youre
able to write a letter, put a stamp on it and mail it, youre able to repair your own credit.

Given the proper knowledge, you can fix your own credit

This statement IS true! Youre 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 theres 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.


You improve your credit score by getting all the negative items on your credit report removed

Its 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, youre 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 youll 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 isnt 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!

This article was posted on December 26, 2005

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