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Credit Repair Myths and Facts
There are no secrets to repairing your credit. Many shady
credit repair agencies would love you to think the contrary.
Negative items can be removed from your credit report and you can
do it yourself. One does not need a credit repair "expert" or
"law firm" to do it either. While the credit world can seem
complex to the average individual, the basics are really simple
once you know them.
Fact: You can remove negative items from your credit
report.
According to the FCRA, you have the legal right to dispute any
piece of information with a credit bureau. Upon doing so, the
credit bureau then has 30 calendar days to investigate the
item(s). After that time, the credit bureau will either update
the item as you request or leave it alone if they proved it was
correct to begin with. If you submit additional information on
the dispute during the 30 days, the credit bureau is allowed to
take an additional 15 days. Disputes can be submitted online at
the credit bureau's site or simply sent via postal mail, which
happens to be my recommendation. Disputes sent in based on the
free credit report now provided under FACTA are given 45 days to
resolve.
Myth: Collection agencies can call you anytime and do as they
please.
To stop collection agencies from calling you, simply send them
a cease and desist letter stating they are only allowed to
contact you via postal mail. This ability is afforded you via the
FDCPA. Collection agencies have a series of actions they must do
to be in compliance. You would be surprised at just how many FCRA
and FDCPA violations are committed on a daily basis by many
collection agencies. Never speak with a collection agency over
the phone. Conducting discussions via written form is best
because you have proof.
Fact: Paying a collection account will not improve your
score.
As far as credit scores go, a paid collection account is the
same as an unpaid one. Your official credit score is called a
FICO score. It takes into account many things such as:
- Age of overall credit file.
- Number of accounts in good standing.
- Number of accounts delinquent.
- Negative items: liens, bankruptcies, repossessions,
etc.
- Time since the negative item was created.
- Amount of your credit being used (utilization).
- New account under six months old (which hurt your
credit).
- Number of hard inquiries.
Typically, mortgage lenders will require delinquent accounts
be cured but this won't improve your score.
Myth: You must pay any bill that comes to your home from a
collection agency.
Under the law you have the right to challenge the legitimacy
of any bill sent to you-it is called validation. By sending a
validation letter to a collection agency they must, by law, cease
all collection activities until they can validate the debt. It is
important to note the word is validation and not verification
which mean two entirely different things. Validation means they
must submit to you proof the bill is yours, which is not a simply
an invoice sent to you. Until that is properly done, they can not
report the item to your credit report, ask you for money or do
anything which can be deemed further collection activity. Do they
anyway? Yes they do. This is why it is important to know the law,
which is on your side.
It is vital that you check your credit report often as most
individuals have erroneous data in them. Don't assume that
everything will work as it should because it almost never does.
No one will be looking out for your credit identity but you.
Credit standing has never been more necessary than it is today.
Just about everything we do in life from applying for a job to
booking a hotel room has something to do with our credit
worthiness. American Consumer Group, a non-profit organization,
has set up a free credit repair site with
all the information mentioned in this article. Go educate
yourself and spread the word.
This article is copyright Jason Andrew Martin LLC.
Jason A. Martin has been conducting business on the Internet
for 11 years. He is a free-lance writer on many topics and is
currently working on obtaining a degree in Journalism and Law.
His blog is displayed at: Jason A. Martin
MORE RESOURCES:
Credit - Google News
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