Credit Bureaus & You

Who Is Equifax ?

Who Is Transunion ?

Who Is Experian ?

Credit Bureau & Credit Repair Myths

Credit Repair & You

Credit Repair Basics

Important Credit Terms

Why Should I Repair My Own Credit ?

When Should I Repair My Credit ?

Building Better Credit - Improve Your FICO Score

More Credit Repair Myths

Your Credit Report

How To Read Your Credit Report

Common Credit Reporting Errors

Monitoring Your Credit Report

What's A Good FICO Credit Score

Credit Myth 1. I can't repair my credit report myself.

Fact: Yes, you can! Remember, the credit bureaus are primarily interested in protecting their profits. Investigating your challenge consumes these profits. The credit bureaus will do everything in their power to discourage consumers from making progress with their credit restoration. You must decide if you are willing to take the time and assume the risks of doing it yourself.

Credit Myth 2. The credit bureaus are required by law to keep derogatory items on your credit report for 7 to 10 years.

Fact: There is no law that compels credit bureaus to report anything on you at all. In fact, the truth of the matter is that credit bureaus are required by law to automatically remove all derogatory items older than 7 years or in the case of a bankruptcy, 10 years. This system of credit "bondage" punishes everyone in the long run. No study has been conducted by any bureaus that prove the seven year mark to be the point where someone recovers from financial hardship. The seven year mark is entirely arbitrarily. In fact, Dr. Bonnie Gution, an advisor to President Bush on consumer affairs, remarked, "...it is our understanding that computer models that predict credit worthiness find most information that is more than two years old nonessential." Most consumers completely recover from their economic crisis within 2 years. Consequently the remaining five or six years, they are forced to loose out on some types of employment, pay outrageous interest on high risk auto loans, forgo the convenience of credit cards and pay cash for every expenditure. In the end, our economy suffers as well as the consumers who have been labeled "deadbeats".

Credit Myth 3. It is impossible to get a bankruptcy off your credit report.

Fact: Bankruptcies come off just like any other derogatory that is incorrectly reported, obsolete, or that cannot be verified. This is where the Fair Credit Reporting Act comes into play. Be it bankruptcy, repossession, or failure to meet an obligation, the law requires the bureaus to delete information in a timely fashion. Remember - credit bureaus don't tell future creditors what happened in your life that caused you to declare bankruptcy. They merely label you.

Credit Myth 4. The information on your credit report cannot be changed.

Fact: Not true. Under the Fair Credit Reporting Act; both the federal and various state laws REQUIRE that items be removed if they are not 100% accurate ore cannot be verified in a timely manner. Credit bureaus are not able to guarantee accuracy in their credit profiles. Although they claim an error ratio under 1 percent, in reality, studies conducted by neutral third parties have determined the credit report error ratio to be closer to 40 percent. Another factor to consider is timing. Because different subscribers report to the bureaus at different times, the information about you may vary from bureau to bureau. The only exception is information obtained from public records. That information includes judgments, bankruptcies, tax liens, wage attachments and notice of default on properties. Keep in mind though, a credit bureau may pick up a default from the public records when it's filed, but they may not pick up the fact that the default was later corrected or dismissed.

Credit Myth 5. It is illegal or immoral to have the information on your credit report altered or removed.

Fact: We belong to a capitalistic society and the credit bureaus are businesses that capitalize on consumer information. Unlike our legal system, the bureaus take no oath to be ethical or truthful. Based on the fact that you have no moral obligation to support any business venture or corporation, let alone a corporation with the power to destroy your financial life, taking steps to clean up your credit report is the right thing to do. The credit bureaus would hang on to every piece of credit information on you forever if it weren't for the Fair Credit Reporting Act of 1971. Thus, in reality, the credit bureaus actually practice credit repair. Based on the fact that they can do this after seven years, why would it be wrong for you to do the same thing sooner?

Credit Myth 6. Paying a past due debt removes it from your credit report.

Fact: Paying off an old debt does not erase the fact that at one time you failed to live up to your part of the agreement. When it comes to most consumer credit, negative information is allowed to stay on your credit report for a maximum of seven years. Look at it like a clock. The seven year clock begins ticking on the "date of last activity," or, in other words, when the last action took place on the account. By paying an outstanding, delinquent debt, you will change the account status to "paid collection," "paid was late," or "paid was charged off"-- which will still stand out as a very negative listing. Furthermore, you will create a new date of last activity on the day you settle the account. The seven year clock will reset and begin all over again. If a creditor proposes a settlement on a debt that you can afford and you are willing to pay, you must get a guarantee IN WRITING from the creditor that ANY and ALL derogatory information regarding that debt will be removed. Otherwise, you've paid the off the debt, but you're really no better off.

Credit Myth 7. Inquiries are not derogatory and will not affect your credit standing.

Fact: Anything that makes you look desperate is derogatory. Remember that credibility goes hand in hand with your credit standing. One or two inquiries may not hurt you, but applying for credit with a lot of institutions at once will raise a red flag, and can potentially lower your score. Don't forget that a credit card company can actually raise your interest rate if they run a credit report on you and detect a change that makes you a higher credit risk.

Credit Myth 8. If you get a derogatory item removed, it will just come back.

Fact: Not if it is removed legally. The same law that requires its' removal prohibits it from being placed back on. The credit bureaus have very cleverly spread this myth through the news media and government regulators. In truth, the credit bureaus will often temporarily delete a negative listing if they haven't heard back from the credit grantor after approximately thirty days. If the credit grantor reports in tardy, say after six weeks and verifies the negative listing, the credit bureau will often reinsert the negative listing on the credit report. This is often known as the "soft delete." Eventually, though, the creditor simply fails to respond to respond and the negative listing is permanently deleted. If the item is verified by the credit grantor, either before thirty days or after, the account may still be challenged again at some future time.

Credit Myth 9. The past equals the future.

Fact: This is the biggest myth of all. Anybody can loose their source of income, fall upon hard times or become ill. The simple truth is, no credit bureau can predict what your financial position will be in 7 years, but if you don't clean up your credit report any credit bureau can hurt your chances of getting credit during that time.

Credit Myth 10. Credit Bureaus are empowered with some kind of governmental authority.

Fact: Credit bureaus have no legal authority what so ever. Of course they hire people who try and make you believe they do, but they're no different than any other private company. In fact, all three credit reporting companies are listed on the New York Stock Exchange! They store information that's reported to them by subscribers, and then turn around and sell that same information back to them. They're sales people, and the product they're selling is your credit information.