subject: Credit Repair 101: Common Misconceptions [print this page] 7 Credit Repair Misconceptions 7 Credit Repair Misconceptions
While trying to obtain financial freedom the issue of credit inevitably arises. Since, we are a debt based society we cant truly be at the top of our financial game without obtaining a good credit score. One of the ways to improve your credit is through repair. I would like to begin by dismissing common misconceptions about credit repair.
#1 Disputing a free credit report obtained on www.annualcreditreport.com is the same as purchasing a report directly from the three credit bureaus.
Unfortunately, this is untrue. The credit reports you receive are the same but, how long they process them is different. If you purchase your report they are mandated by the FCRA to respond within 30 +5 days. However, if you redeem your free annual credit report they have 45 +5 days to investigate.
#2 Credit repair is about removing inaccuracies on your report.
This is by far the most common misconception. If you request validation and a collection agency cannot validate your account they must remove it whether you owed the original creditor or not. Dont feel sorry for the credit bureaus or collection agencies. If they dont follow proper regulations nail them to the wall and demand removal of the accounts they cannot validate or verify.
#3 Disputing items online is the same as by mail.
When you dispute accounts online you cant keep sufficient records of your attempts to resolve inaccuracies or unfair collection practices. Plus, you wont have record of all contact between you and the credit bureaus should a FTC complaint be warranted.
#4 Paying off collection accounts is an easy way to raise your credit score.
Paying off old collections can actually damage your credit score because the last activity will be updated after payment. However, if you are trying to obtain a mortgage it maybe be worth it because, lenders would rather see paid collections.
Also, paying debt collectors who have not proven a current relationship with the original creditor can result in a reinsertion, should the debt be resold.
#5 There arent any special mailing requirements when disputing an account.
When sending letters to a collection agency with a P.O. Box use certified mailers. If the collection agency has a physical address use certified mail reply receipt. This is important because you need to document their receipt. If FCRA, FDCPA, or FACTA violations occur, youll have copies of what you sent and proof they received it.
#6 I dont have to keep letters from the credit bureaus. Theyll have record of my reports.
Please dont rely on the credit bureaus for support. Transunion and Equifax tend to be pretty decent. However, Experian is the devil. Regardless, none of them should be trusted to improve your credit profile. If you ordered online please, please, please print it out. Dont try to save the page or rely on PDF. Get a hard copy.
#7 Credit repair is simple.
Oh, how I wish this was true. Be in it for the long haul, if you have several negative accounts. Collection agencies are brutal. So, you have to be patient, consistent, and ready for war. There are different SOL (statue of limitations) and debt collection regulations for each state. So be ready to read, write, and read some more.
