KEEPING IT REAL – Common Myths About Credit Repair Debunked
If your credit score has seen better days, you’re probably wondering how to fix it. After all, your credit score isn’t just a number; it’s a critical key to unlocking financial opportunities in today’s economy. Whether it’s buying a house, securing a car loan, or accessing other financial opportunities, a high credit score is essential.
But why is your credit score low, especially if the reason isn’t immediately clear? And more importantly, what can you do to improve it? With so much information about credit repair out there, it’s hard to know what’s accurate. Friends might offer advice, and advertisers might promise to erase bad credit in no time—but can you trust them? Let’s break down some common credit repair myths and help you separate fact from fiction.
Myth: Paying Off Debts Will Immediately Boost Your Credit Score
Truth: Paying off debts can improve your credit score, but it’s not immediate, and it’s not the only factor.
One of the biggest misconceptions about credit repair is that paying off debt instantly results in a higher credit score. While it’s true that reducing your debt is a positive step, the credit system is more complex. Credit scores reflect responsible debt management over time, which includes taking on debt, making regular payments, and maintaining a mix of credit types. Paying off old debts, especially those in collections, can leave a negative mark on your report even after the debt is settled.
Imagine your credit score like a marathon race. Paying off debts is like getting a boost of energy—helpful, but not enough to win the race if you haven’t trained properly or if there are other obstacles in your way. A holistic approach to your credit is necessary to reach the finish line.
Myth: Closing Credit Card Accounts Will Instantly Improve Your Credit Score
Truth: Closing old accounts might actually lower your score.
The idea that closing credit card accounts will boost your score is another common myth. In reality, closing old accounts can shorten the average age of your credit history, which can negatively impact your score. Additionally, it reduces your overall available credit, which is another factor that can lower your score.
Think of your credit history as a library of books. Closing old accounts is like removing entire volumes from the shelves—the library (your credit score) appears smaller and less established, which can hurt you in the long run.
Myth: You Only Have One Credit Score
Truth: There are multiple scoring models, and each of the three credit reporting agencies may have different information about you.
While FICO is the most commonly used credit score, it’s not the only one. VantageScore is another model, and there are others that lenders might use. Additionally, three major credit reporting agencies—Equifax, Experian, and TransUnion—may have different information, leading to variations in your scores. A good starting point in credit repair is to review your reports from all three agencies to ensure accuracy and get a complete picture of your credit health.
Imagine you’re applying to different schools, and each school (credit agency) has a slightly different grading system. To truly understand your academic performance (creditworthiness), you need to look at all the report cards, not just one.
Myth: You Can/Can’t Remove Negative Information From Your Credit Report
Truth: Both statements are misleading. You can’t simply erase accurate negative information, but you may have options to mitigate it or get inaccurate information removed.
Be wary of anyone promising to “magically” remove negative marks from your credit report. If the information is accurate—such as late payments or foreclosures—it can’t be removed outright. However, there are legitimate ways to address negative information:
Requesting a goodwill adjustment from your creditor
Negotiating a pay-for-delete agreement (though not all creditors will agree)
Rehabilitating federal student loan debt
If you find inaccurate information on your report, the Fair Credit Reporting Act (FCRA) gives you the legal right to dispute it. Credit bureaus are required to investigate and correct any inaccuracies.
Picture your credit report as a painting. Some blemishes (negative marks) can’t just be wiped away, but you can work on restoring the picture by fixing mistakes or negotiating with the artist (creditor) to make adjustments.
Myth: Credit Repair Is Just As Effective As Professional Legal Help
Truth: Working with a Credit Repair Lawyer is often the safest and most effective strategy.
Credit repair can be complex, time-consuming, and prone to mistakes if you’re not familiar with the process. While a DIY approach might seem like a money-saver, it’s often not as effective as working with a professional. Even legitimate credit repair companies are limited in what they can do—they can’t offer legal advice or represent you in court if necessary.
Think of credit repair like fixing a car. Sure, you can try to do it yourself, but without the right tools and expertise, you might end up causing more damage. A professional mechanic (credit repair lawyer) knows how to get your car (credit) back on the road smoothly.
Myth: Only People With Bad Credit Need to Worry About Credit Repair
Truth: Credit repair isn’t just for those with bad credit; even people with decent credit can benefit from a credit check-up.
It’s a common misconception that credit repair is only for those in dire financial straits. The reality is that everyone can benefit from reviewing their credit report regularly. Even if your score is decent, there could be inaccuracies or outdated information that could be dragging it down. Addressing these issues can help you improve your score and secure better interest rates or loan terms in the future.
Think of credit repair like a routine health check-up. You don’t wait until you’re seriously ill to see a doctor—you go for regular check-ups to catch and address issues early. The same goes for your credit health.
Myth: Disputing Credit Report Errors Will Hurt Your Score
Truth: Disputing errors on your credit report will not hurt your score—in fact, it’s your right and can only help you.
Some people fear that disputing errors on their credit report might backfire, but that’s not true. The Fair Credit Reporting Act (FCRA) ensures that you have the right to dispute inaccuracies, and doing so will not harm your score. In fact, removing incorrect information can only improve your credit health.
Think of your credit report as your personal record. If there’s a mistake in it, disputing it is like correcting a typo in your official documents—necessary to ensure that your record is accurate and reflects the truth.
At R23 Law, our California Credit Repair Lawyers are experts in credit repair law. We know means of recourse that credit repair services likely don’t use, and we will use the full extent of the law to help you get your good credit back! Our firm will take the burden off you so you can focus on living your life, rather than worrying about your credit score.
