Myth #8

If you get a derogatory item removed, it will just come back.  Not if it is removed legally.  When it is removed with cause under the Fair Credit Reporting Act it cannot legally be placed back on your credit report.  The same law that required its removal prohibits it from being placed back on.

Myth #9

The past equals the future.  This is the biggest myth of all.  The concept that once bad, always bad, or at least for 7 years is totally false.  Anybody can run into hard times or an emergency situation, but that doesn’t automatically mean that they are a poor credit risk for a magical 7 years.  The simple truth is, no credit report or scoring model can predict the future.

Myth #10

I cannot restore my credit on my own.  Yes, you can!  You can try to do it yourself (just like you can represent yourself as an attorney in a court of law).  But it is usually best to allow experienced professionals to educate you and assist you in restoring your credit profile.

Studies have revealed that millions of Americans (79% or more) have significant errors in their credit profiles.  These errors affected credit scores by 50+ points.  If you feel that you may have errors in your credit report, call me and I will refer you to those who may be able to help.

Myth #7

Credit reporting and credit scoring were developed to educate and inform consumers.  False.  The Big 3 and FICO serve the banking community along with any other service provider looking for an excuse to “rate” their service to consumers.  Evidence: why do bankruptcies, parking tickets, public records, etc. report twice?

Who in the heck are the Big 3 and FICO?  The Big 3 are Equifax, Trans Union, and Experian.  FICO is a company that was founded in 1956 by Bill Fair and Earl Isaac.  FICO stands for Fair Isaac Company.  In 2007, FICO sold it’s 100 Billionth (that’s with a B) FICO score.

Surprise!  The Big 3 and FICO sell your credit scores to make a profit.

Myth #4

The burden of proof rests with the consumer to validate information contained on your credit report.  The opposite is true under the Fair Credit Reporting Act, both federal and various state laws REQUIRE that the credit agencies bear the burden.

Myth #5

It is illegal or immoral to have the information on your credit report altered or removed.  Not only is it not illegal or immoral, but it is what the Fair Credit Reporting Act is all about.  It was enacted by congress for the very purpose of protecting consumers from the intrusion of the credit agencies into our lives

Myth #6

Paying a past due debt removes it from your credit report.  Just because you pay an old debt does not change or erase the fact that at one time you were not paying on it as you agreed.  Can this record be changed?  Absolutely!

I was in a Continuing Education class a week or so ago given by a mortgage company.  They gave 10 myths of credit repair that I thought you might find interesting and maybe valuable.  I’m going to give them over the next few days so the blog isn’t too long.  If you have any questions about repairing your credit, give me a call at 801-403-4965.

Myth #1

Credit agencies are empowered with some kind of governmental authority.  Credit agencies have no legal authority at all.  They are simply billion-dollor corporations who are in the business of gathering and selling credit information.

Myth #2

The credit agencies are required by law to keep derogatory items on your credit report for 7 to 10 years.  There is no law that the credit agencies report anything on you at all.  Just the opposite is true!  Credit agencies are required by law to automatically remove all derogatory items older that 7 years or in the case of a bankruptcy, 10 years.

Myth #3

It is impossible to remove an item of public record.  Bankruptcies, tax liens, etc. come off just like any other item that is incorrectly reported, obsolete, erroneous, misleading, incomplete, or that cannot be verified.  Remember, the nature of the item has nothing to do with its removal under the Fair Credit Reporting Act.