Credit ... Did you know

Credit ... Did you know ...

Did you know ... from 1997 to 2006 there have been 58,625 complaints filed with the FTC against the credit reporting companies? Of these complaints only 8556 were for identity theft - the other 50,069 complaints were for unfair reporting, in correct, erroneous, wrong information on individuals credit reports.

Did you know ... by law, as a result of a lawsuit filed by the Federal Trade Commission "FTC," each of the 3 credit reporting companies must provide you with your credit report, free, once a year. The only website approved by the FTC for consumers to receive their free credit report is www.annualcreditreport.com. Don't be fooled by any of the other "free" credit report ads you've seen.

Did you know ... where you live can (and does) affect your credit score? The credit reporting companies take your neighbor's credit into account when assessing your credit!

Did you know ... the credit bureaus have placed themselves in the position of both judge and jury in relation to your credit file. Do not forget one very important difference … A judge will give you a chance to defend yourself before ruling. We are supposed to have the opportunity in America to face our accusers before judgment is passed. This is entirely untrue when it comes to your credit records.

The truth is creditors and credit bureaus have been swapping information about you behind your back and without your permission for a long time. In effect, it is hearsay and it can cause you severe economic hardship. The current system does not give you the opportunity to defend yourself before inscribing your credit file with negative and damaging information (even if it is not yours). Their perspective is that you must prove to them that the negative information on your credit report is incorrect, invalid, erroneous, or otherwise non-verifiable before they will remove it. In other words, in the eyes of the credit bureaus … you are guilty until proven innocent. We are brought up to believe that one is innocent until proven guilty. Why we are not extended the same courtesy by the credit bureaus? Why do they not give us a chance to defend ourselves before they place negative information on our report? Fact is, consumer rights cost them money.

How is a system like this allowed to operate in our democracy? The sole focus of credit bureau companies is profit. Your credit file is their product. The credit bureaus have no government affiliation (except for spending millions on lobbying efforts). These private corporations sell your personal financial information to anyone that will pay for it…who generally accept it as gospel. (Although it has been proven many times that mistakes do happen all too often.) Creditors then reciprocate by giving back to the bureaus any information that they may have on you.

Let's look at some of the myths about credit ...

Myth # 1 When I pay off a past-due account, such as a charge off or a collection account, it will show “paid” and no longer be negative.

It is difficult to fully restore your credit without paying your outstanding debts. However, paying off a debt can actually hurt your credit. Negative items on your credit report are allowed to stay on your credit report for a maximum of seven (7) years, except for bankruptcy that can stay for up to ten (10) years. This 7 or 10-year clock begins ticking at the date of last activity. Making a payment represents new activity and restarts the clock. When paying an outstanding debt, you will change the account status to paid collection, paid charge-off, satisfied judgment, or paid ‘was xxx days late”. This is still considered very negative and appears as though you had to be strong-armed by the credit bureau to pay the account. It is almost always prudent to have a professional help so as to not further damage your credit by trying to do the right thing.

Myth # 2 If a negative item is successfully deleted from my credit report, it will just come right back on my report.

The credit bureaus have cleverly spread this myth through the news media and government agencies. In truth, the credit bureaus will often temporarily delete a negative listing if they have not heard from the credit grantor for 30 days since an item has been disputed. Should the credit grantor submit verification a week or two later, it will be re-inserted. (This is called a soft delete.) Most of the time the creditor simply fails to respond and the negative item is permanently deleted. If the creditor verifies the item the account may still be deleted later in the process as the challenging process is intensified.

Myth # 3 There are items such as bankruptcies, foreclosures, and tax liens that are impossible to remove from the credit report.

There is no type of negative listing that has not been removed from a credit report - thousands of times.

Myth # 4 Disputing a credit report is easy. Any consumer can do it themselves.

Disputing a credit report is easy. Getting results from the credit bureaus as a layperson is amazingly difficult, complex, and infuriating. The Federal Trade Commission receives more complaints against credit bureaus than any other type of business . In February 2000 the 3 major credit bureaus paid a fine of 2 ½ million dollars for ignoring consumers requesting information regarding their file. Remember the credit bureaus are primarily interested in protecting their profits. Investigating consumer disputes consumes these profits. Short of sparking a mass number of lawsuits, the bureaus do everything in their power to impede your progress with credit restoration. Restoring your own credit is like repairing your own transmission or representing your self in court; it is possible, but you have to be willing to invest the time to learn the processes, assume the risks of your inexperience and realize that it will probably take you longer and you probably will be less effective than a professional.

Myth # 5 The credit bureau allows me to submit a 100-word explanation as to my side of the story. Creditors will read my statement and take it into consideration.

No known creditors consider the information submitted in you’re statement. This statement only verifies some of the negative items on your report. The 100-word explanation should be the first thing deleted from your credit file.

Myth # 6 The credit bureaus are ... a branch of the government, infallible, or otherwise above reproach.

The credit bureaus are publicly traded companies in business to impress stockholders. They are not government agencies. In fact, they are one of the most heavily regulated industries. The strict regulations stem from a public outcry of abuses and mistakes. A recent survey by an independent research group revealed that 70% of credit reports contained mistakes or errors. The prevalence of errors has lead to consumer protection legislation that allows consumers to challenge the bureaus and force the removal of inaccurate, outdated or unverifiable information.

Myth # 7 I can create a totally new credit file by getting a federal tax ID number or changing a few numbers on my social security number.

This fraudulent scheme has proven to be complex, difficult and illegal. Lying on a credit application is a criminal offense and with the linking of computer systems it is virtually impossible to get away with. It is in your best interest to hire adequate representation and face the music by confronting the credit bureaus armed with the rights Congress has granted you through the consumer protection laws.

Myth # 8 If I build enough good credit, it will offset my bad credit and make me creditworthy.

Any amount of bad credit is devastating to your chances of being approved by a creditor. The approval is almost never in the hands of a human sitting across a desk from you. It is a computer achieving a point total. The slightest amount of negative credit will cause an auto loans interest rate to skyrocket. Generally, even a little bad credit (regardless of the amount of good credit) will cause you to be declined.

Myth # 9 Nonprofit organizations like Consumer Credit Counseling Service (CCCS) can help me restore my credit.

Nonprofit debt counseling services assist people who are over their heads in debt and are seeking an alternative to bankruptcy. CCCS are funded and controlled by credit grantors and credit bureaus. When you are working with CCCS your creditors will often note this on your credit report. This is a huge red flag for prospective credit grantors - treated the same as Chapter 13 bankruptcy. Some of the very worst credit reports that we see are or have been participants in the CCCS or similar programs.

Myth # 10 It is illegal for creditors to take off a negative-listing on my credit report. The law requires that these items remain on the credit report for at least seven (7) years.

When you speak to credit grantors, collection agencies, or credit bureaus, their typically under-educated staff may tell you all manner of such pseudo-legal nonsense. The law "limits" negative information from appearing longer than the legal seven (7) year maximum. The credit grantor or credit bureau may choose to delete the item whenever they see fit.

There are good programs which can can help you bring your credit score up by as much as 127 points!

Let's talk once you've gotten your report. We can help - we've just partnered a National Credit Foundation which enable us to offer this special program to help you get your credit back on track and increase your credit worthiness. This is not a "quick fix" scam.