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10 Myths of Credit Repair
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10 Myths of Credit Repair

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Myth # 1: When I pay off a past-due account, such as a charge off or a collection account,
it will show "paid" and no longer be negative.

It is difficult to fully restore your credit without paying your outstanding debts. However, paying
off a debt can actually hurt your credit. Negative items on your credit report are usually allowed
to stay on your credit report for a maximum of seven (7) years. This 7 or 10 year clock begins
ticking at the date of last activity or date of first delinquency. When paying an outstanding debt,
you can change the account status and the date of last activity which can lower your scores.

Myth # 2: If a negative item is successfully deleted from my credit report, it will just come
right back on my report.

The credit bureaus have cleverly spread this myth through the news media and government
agencies. In truth, the credit bureaus will often temporarily delete a negative listing if they have
not heard from the credit grantor for 30 days since an item has been disputed. Should the credit
grantor submit verification a week or two later, it will be re-inserted. (This is called a soft delete.)
If the creditor fails to respond the negative item can be permanently deleted. If the creditor
verifies the item the account may still be deleted later in the verification process.

Myth # 3: There are items such as bankruptcies, foreclosures, and tax liens that are
impossible to remove from the credit report.

There is no type of negative listing that has not been removed from a credit report thousands of
times. In fact the IRS currently has a program to remove paid federal tax liens or if a payment
arrangement has been made and a certain number of payments have been made. (Some states
are looking at this program for state tax liens)

Myth # 4: Disputing a credit report is easy --- any consumer can do it themselves.

Disputing a credit report is easy. Getting results from the credit bureaus as a layperson is
amazingly difficult, complex, and infuriating. In February_2000 the 3 major credit bureaus paid a
fine of 2 ~ million dollars for ignoring consumers requesting information regarding their file.
Remember the credit bureaus are primarily interested in protecting their profits. Investigating
consumer disputes consumes these profits. Sparking a mass number of lawsuits, the bureaus
do everything in their power to impede your progress with credit restoration.

Restoring your own credit is like repairing your own transmission or representing yourself in
court; it is possible, but you have to be willing to invest the time to learn the processes, assume
the risks of inexperience and realize that it will probably take you longer and you will be less
effective than a professional.

Myth # 5: The credit bureau allows me to submit my 100-word explanation. Creditors will
read my statement and take it into consideration.

No known creditors consider the information submitted in your statement. This statement only
verifies some of the negative items on your report. Most of the time the 100-word explanation
should be the first thing deleted from your credit file.