The Top 10 Credit Myths Consumers Believe

Here is a list of the top 10 credit myths that most consumers still today unfortunately believe to be true.

Myth #1:  Credit agents are empowered with some kind of governmental Authority.

Actually credit agencies have no legal authority at all.  They are privately held companies who are in the businesses of selling credit information.

Myth #2  Credit agencies are required by law to keep derogatory items on your credit report for 7 to 10 years.

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

Myth #3  It is impossible to get a bankruptcy off

Bankruptcies come off just like any other derogator that is incorrectly reported, obsolete,  incomplete or cannot be verified. Remember, the nature of the item has nothing to do with its removal under the Fair Credit Reporting Act.

Myth #4  The information on your credit report cannot be changed.

The opposite is true under the Fair Credit Reporting Act: both Federal and various State Laws REQUIRE that items be removed if they are not 100% accurate or cannot be verified in a timely manner.

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.  This record can be changed!

Myth #7  Inquiries are not derogatory and will not affect your credit standing.

Anything that erodes your financial credibility is damaging to your credit standing. In the case of inquiries, one or two is not too bad, but any more than that and they begin to tell a story of their own. Any prospective credit grantor will look at your credit report and think that you are desperate for credit.

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  A Debt Collector can call you repeatedly at work, threaten to sue you, take your house or put you in jail if you don’t pay up on old accounts?

This is completely false! Know your rights. Under the Fair Debt Collection Practices Act agencies are expressly forbidden to harass the client. They also cannot go after family and friends and disclose the debt information.

Myth #10  I cannot restore my credit on my own.

Actually you can restore your credit on your own.  But you can also allow experienced professionals to educate and assist you in leveraging your rights under the law.

Click below to learn more

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Originally posted 2014-02-05 00:41:34.