With so much misinformation being spread about consumer credit repair, I’ve decided to take it upon myself to list the top 10 lies, myths, and fallacies about credit repair. All myths have been researched, but as always, I encourage you to research them for yourself. The truth is out there; seek and ye shall find. Here we go:
Myth #1: Credit repair is illegal.
The Truth: Credit repair is not only legal, but protected by federal laws such as the FCRA and FDCPA. However, creating a new credit file and/or new identity is illegal.
Myth #2: Credit repair doesn’t work.
The Truth: The credit repair agency that I regularly refer clients to has helped over 400,000 clients improve their credit since 1991. That’s just one company. Thousands more have gotten great results by doing it on their own.
Myth #3: You can only dispute negative items on your credit report if you think they are not yours.
The Truth: You can dispute any negative account on your credit report that you want. Whether the account is “really” yours or not has no bearing on the consumer reporting agencies responsibility to verify it. Under the Fair Credit Reporting Act, the only information that can remain on your credit report is not what is accurate, but what can be proven as accurate. If it can’t be proven and verified then it must be removed.
Myth #4: The consumer reporting agencies are non-profit, government agencies.
The Truth: CRAs are privately owned, for-profit corporations.
Myth #5: Credit repair agencies are all scams.
The Truth: The FTC has been coming down hard on all credit repair agencies that don’t abide by the Credit Repair Organizations Act. Most of the scam artists are gone and most of the credit repair companies that exist nowadays are not scams.
Myth #6: A credit counseling service can help me restore my credit rating.
The Truth: Whoa is this one ever a lie! Credit counselors work with your creditors, to help them get their money from you destroying your credit in the process.
Myth #7: After a major financial plunge like bankruptcy, foreclosure or repossession, I won’t be able to get credit for 7-10 years.
The Truth: You can start enjoying good credit almost immediately after such an event if you start repairing and rebuilding your credit right away.
Myth #8: Everything a credit repair clinic can do for you legally, you can do for yourself at little or no cost.
The Truth: Ok, this one isn’t really a myth. It’s true…kind of. You see, the credit bureaus will try to make it as hard as possible for you to repair your credit. They have many tactics that they use to discourage consumers from contacting them. Most consumers get frustrated and give up because of the obstacles put before them by the credit bureaus.
The credit bureaus consistently violate consumer’s federal rights and constantly get sued for doing so. Credit repair agencies have been dealing with them for years and they know how to play the game. They know what works and they know when your federal rights have been violated. Many of them will help you seek litigation or refer you to an attorney if and when it comes down to that.
Myth #9: You have to hire a credit repair agency or lawyer to fix your credit.
The Truth: As mentioned above, there are benefits to hiring a credit repair agency. However, if you are willing to put in the time to learn how to do it on your own, you don’t need to hire anyone. There are many credit repair communities online that are willing to help you out and share methods with you for free.
Myth #10: Pulling your own credit report will count as an inquiry and hurt your credit scores.
The Truth: You can pull your own credit as many times as you want – if you are not applying for a loan. It’s considered a soft pull and does not count as an inquiry towards your scores. However, if you have a lender pull it for you, that does count as a hard inquiry and will make your scores drop.