Credit Repair Myths

 

#1 "Credit repair doesn't work"

It is true that credit repair/restoration is more "art" than "science" that does not mean that it does not work but keep in mind that if you undertake to repair bad credit, there's never any guarantee you can restore it to "perfect" status. Nevertheless in almost every case you can improve your credit score.

While removal of negative information alone will go a long way toward improving your credit score in most cases you will have to also add positive lines of credit,

#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.


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.

#3 "Credit repair companies are all scams"

It's true that there are bad credit repair agencies which can be said of every industry, realtors, mortgage professionals, etc - yet we don't label all of these professions' members as bad apples.

There are many honest credit repair companies that are not "scams" but please be aware of any who make promises of guaranteed 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. Also, as another safeguard ask for a money back guarantee.

#4 "It's too difficult to fix your own credit"

I may be shooting myself in the foot but a credit repair company isn't going to do anything for you that you can't do for yourself. Credit repair/restoration isn't rocket science. It involves analyzing your report, determining which items need to be addressed and writing letters to credit bureaus. Given the proper knowledge you can fix your own credit, fix your own car, fix your own electrical, etc. Fixing your own credit is relatively straightforward but you do have to know how to go about it.

But there's a right way and a wrong way to do it.