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There are a lot of misunderstandings when it comes to repairing your credit. I'm sure you've heard stories of this and that, but I am here to debunk some credit repair information that is often misrepresented to borrowers. Here is a list of 9 credit repair myths that you will surely find interesting.
- It is impossible for a bankruptcy to come off of your credit history report. This is false. Just like any other type of negative on your account that is reported incorrectly, erroneous, obsolete, incomplete or cannot be verified can be removed by filing a dispute with the bureau which the bankruptcy is being reported to.
- Information on your credit report cannot be changed. The Fair Credit Reporting Act requires that any items which are incomplete, are not 100% accurate or cannot be verified should be removed from your credit report.
- It is illegal for information on your credit report to be removed or changed. This is simply not true. As number 2 above states the Fair Credit Reporting Act requires information to be changed or removed if inaccurate. The whole reason the act began was to protect consumers from the credit bureaus taking over a borrower's life. The Credit Bureaus have no legal rights over you.
- Credit bureaus are a government entity. Credit bureaus do not have any legal authority over you and they are not government owned or controlled. Credit bureaus are privately owned companies that sell your credit information to you and to 3rd party institutions.
- Credit bureaus must keep all negative information on your account for at least 7 years. There is no law governing the credit bureaus to do this. In fact, Credit Bureaus are required to remove any negatives on your account that are older than 7 years. If you get a bankruptcy, depending on the type, it needs to be removed within 7 or 10 years.
- Inquiries do not hurt your credit score. This again is not true. Any inquiries on your credit history report will knock down your credit score. Depending on how many requests are made in a short period of time it can affect your credit score by as much as 50 points.
- Payment of a past due debt will automatically remove it from your account. Even though you paid off an old debt your history of payments will not be edited or removed, unless you ask of course. It is possible to have negatives moved.
- A credit repair company is required to repair my credit. Absolutely not, you can repair your credit pretty easy. It just takes time, dedication, patience and some negotiating skills. Many people choose to fix their own credit.
- I had bad credit in the past, so I cannot get a loan in the future. Anyone can have financial problems, just because you had troubles before does not mean you will have the same problems in the future. If you have a good track record since your troubles occurred and were subsequently fixed, that is what lenders are concerned with. Did you have problems and were you able to get back on your feet?
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