 |
8 Common Myths About the Consumer Credit System
Author: Stuart Hunter  | Posted: 15-07-2008 | Comments: 0 | Views: 6 | Rating: (173)  (?) 
Misinformation and half-truths abound in discussions about credit reporting and scoring. People have so many different ideas about what is true when it comes to dealing with their credit that regardless of the question you ask, you are liable to get a wide variety of conflicting information.
At the end of the day, all this ignorance about the credit system does nothing but help the lenders and other financial institutions who use your credit information. If people simply knew a little more about their credit, they would be able to take steps to improve their credit. By improving their credit, people could avoid having to pay the high interest rates that pad the lenders profits.
What follows are some of the myths people believe to be true about the consumer credit system. By distancing yourself from these defeatist fallacies, you can open yourself up to learning the truth about your credit and what you can do to manage it.
1) The Myth: The big three credit bureaus (Equifax, Experian, and Trans Union) are official agencies tasked with maintaining your credit reports.
The Truth: These three companies are just that, for-profit companies. The big three credit bureaus are businesses who make money by collecting consumers financial information and then selling it to creditors, marketers, employers, and even back to you I the form of your credit reports.
2) The Myth: There law states that your creditors must report late payments, collections, charged off accounts, etc. to the credit bureaus. Once these items are added to your credit reports, they must remain on your reports for 7 years.
The Truth: The Fair Credit Reporting Act (FCRA) does not require anything to be reported to the credit bureaus. In addition, the FCRA does not list a minimum amount of time that reported items must be listed on you credit reports. It only requires that listings remain on your credit reports for no more than 7 years for most items. The truth is that your creditors can remove items from your credit reports at any time.
3) The Myth: There is nothing you can legally do to repair your credit.
The Truth: There is a wide variety of things you can do to add positive credit to and remove bad credit from your credit reports. Every law that applies to the credit bureaus is written to protect you. By taking advantage of their rights under these laws, people have forced the credit bureaus to permanently delete millions of negative items from their credit reports. For every person that claims that it is impossible to remove bad credit from your credit reports, there is another person who has already done it.
4) The Myth: It is impossible to remove accurate information from your credit reports.
The Truth: Actually, this myth is correct, but not in the way most people think. When the FTC talks about removing accurate information from your credit reports, they are using the word “accurate” in the legal sense as defined by numerous credit laws and legal decisions. To help get a better understanding of what their version of “accurate” means, it helps to know what is considered inaccurate. According to the law, inaccurate credit listings also include listings that are untimely, misleading, biased, incomplete, and unverifiable.
So yes, it is impossible to remove “accurate” negative information form your credit reports, but many of the things you think may be accurate right now you will know are actually misleading, biased, unverifiable, etc. once you learn more about the consumer credit laws.
5) The Myth: It doesn’t matter if something gets removed from your credit reports, it will just come back.
The Truth: While it is possible for a deleted item to reappear on your credit reports, it is rare. The FCRA makes it more difficult from the credit bureaus to re-report an item to help protect you from having to continually dispute the same items over and over again.
6) The Myth: It is illegal for anyone to repair your credit for you.
The Truth: You have the right to enlist the help of a credit repair professional if you so choose. In fact, U.S. District Court Judge, J. Wexler said about credit repair companies that “since allowing third parties to assist consumers will likely lead to the expedited correction of credit reports, it will further the purposes of the [fair credit reporting] acts.”
7) The Myth: There is no reason to use a credit repair company because you can repair your own credit for free.
The Truth: While people point out that you can save money by repairing your own credit, they rarely mention the other costs associated with repairing your own credit reports. Aside from the material costs of mailing certified letters (a practice that is recommended by most credit repair experts), many people also have to spend a significant amount of time learning about the various credit laws, learning the tactics for writing effective dispute letters, dealing with credit bureau stall letters and information requests, and other tasks associated with managing the credit repair process.
When considering all the costs involved with repairing their own credit, many people find that it is more than worth the money to have someone else repair their credit for them.
8) The Myth: Repairing your own credit is easy.
The Truth: For a few people, repairing their credit is easy. Most people find out that the opposite is true. Remember that lenders want to keep your credit score low and the credit bureaus do not want to deal with you because there is no money in it. The law may be on your side, but these organizations are not and they will work to make the credit repair process difficult. People may say that all you have to do is write a dispute letter and send it to the credit bureaus. But what do you do when this doesn't work for you? At that point, the real work of credit repair begins.
To illustrate the difficulty of repairing your own credit, consider that, according to a survey of over 2,000 Lexington Law credit repair clients, almost 40% had attempted to repair their credit on their own before enlisting the help of the firm.
Rate this Article:
Current: 0 / 5 stars - 0 vote(s).
Article Source: http://www.articlesbase.com/credit-articles/8-common-myths-about-the-consumer-credit-system-484989.html
About the Author:Since 1991, Lexington Law, the nation's largest credit correction law firm, has been helping credit repair clients legally take on their credit. More information about Lexington Law can be found at www.lexingtonlaw.com.
|
Submitting articles has become one of the most popular means of generating quality backlinks and targeted traffic to your website. Join us today - It's Free! |
|
Related Articles
2 Ways the Credit System is not Like the Legal System
By: Stuart Hunter | 04/06/2008 | Credit
While the legal system has been set up to protect the rights of the individual, the credit system protects the profits of lenders. Guilty until proven innocent is not a luxury you have in the credit system.
Whether or not You Believe Credit Repair Works, You are Correct
By: Stuart Hunter | 25/06/2008 | Credit
Credit repair works for those people who are willing to devote the time and resources towards fixing their credit reports. Those people who do not believe in credit repair will never see the benefits it can provide.
The Laws That Make Credit Repair Possible
By: Stuart Hunter | 31/03/2008 | Credit
There are a number of consumer protection laws designed to help protect you from being taken advantage of by the credit reporting system. It is these laws that state what sort of information can be on your credit reports, how long it can be listed, and what you can do to remove inaccurate and unfair negative credit listings.
6 Top Rated Credit Repair Tips
By: Allan Zolis | 17/08/2008 | Credit
It can be difficult facing the reality that you are in debt and have a poor credit. Take the top rated credit repair tips listed in this article into consideration as you begin to repair your credit. You will find yourself repairing your credit far quicker than ever imagined.
Choosing a Credit Repair Company
By: Anne Hammel | 08/07/2008 | Credit
Selecting a credit repair company is a big decision. Choosing the wrong credit repair company can end up wasting money and perhaps more importantly, your time. Choosing the right credit repair company, however, may be one of the best things you can possibly do for your financial future.
Piggybacking and Credit Repair
By: Anne Hammel | 26/08/2008 | Credit
Piggybacking is a method of credit score improvement that has been used for many years but has recently come under fire by lenders and FICO. Today, piggybacking is still an effective method of credit repair, although it is harder to abuse than it was in the past.
Know Your Rights to Avoid Credit Scams!
By: Jay Delgado | 11/04/2008 | Credit
This article is an overview of credit repair scams and a warning to beware of and to look out for them.
Check Your Credit Score Before Buying a Car
By: Stuart Hunter | 28/08/2008 | Loans
Your credit score is a key component in your ability to be approved for a car loan at a low interest rate. Learn four steps you should take before you begin shopping for a car that may end up saving you thousands.
Got a Question? Ask.
Ask the community a question about this article:
Q&A Powered by: 
Latest Credit Articles
Fraud Alerts and Identity Theft: is This Enough?
By: Bernard Pragides | 06/09/2008
Fraud alerts are one weapon in your arsenal that can be a part of your overall effort at responding to and preventing identity theft.
Business Credit Cards – the Perks and Bonuses of a Business Credit Card Holder
By: Klye Anderson | 06/09/2008
Running a business or a company is challenging as it is. Imagine now how relieved business owners and entrepreneurs are that business credit cards are around to assist them in tight cash flow situations.
Bad Credit Warning
By: S. Lieberman | 05/09/2008
If your credit is damaged, don't fall victim to a company that promises to be able to repair your credit for you. Everyday, companies nationwide appeal to consumers with poor credit histories. They promise, for a fee, to clean up your credit report so you can get a car loan, a home mortgage, insurance, or even a job. The truth is, they can't deliver. After you pay them hundreds or thousands of dollars in up-front fees, these companies do nothing to improve your credit report; many simply vanish with your money.
Information About SimplyCash By American Express And Other American Express Cards
By: Kristi Ambrose | 05/09/2008
SimplyCash is also a part of another network called Open Network which allows you to get additional savings from specific companies such as Hertz car rental, Jet Blue Airlines, Fed Ex deliveries, Delta Airlines and Gateway electronic products. This seems like it would be a really good card for a business or a person that travels a lot.
Ways to Repair Bad Credit
By: lily005 | 05/09/2008
Your credit rating determines whether or not you will be able to get a loan in the future. A bad credit report might mean that you will not be able to get a car loan, mortgage, or debt consolidation loan. You should take measures to repair the bad credit.
Help You Repair Credit
By: lily005 | 05/09/2008
There are some steps you can take to help repair your credit and gain a better chance at receiving these rates. Here are tips on how to do this.
Get Home Loan With Bad Credit
By: lily005 | 05/09/2008
Home mortgage loan refers to the loan lent to someone who buys a house from a developer, makes the initial payment and lets the bank to pay the rest in installments. He will use the house as collateral and pay the principle and interest on time. With flexible payments and terms, today,mortgage lenders offer a wide variety of loan products.
Ways to Fix Credit
By: Elisa002 | 05/09/2008
Many people are wondering how to repair their bad credit. It's not easy for them to handle that problem. Your first instinct might be to file for bankruptcy when you're in over your head. It's not always the best solution. Really, it's the solution of last resort. Here are some tips for credit repairing, when you're done and the last derogatory marks have been amended or removed, the feeling of relief is one of the best feelings in the world. You should try it on your own. The feeling of having
More from Stuart Hunter
Check Your Credit Score Before Buying a Car
By: Stuart Hunter | 28/08/2008 | Loans
Your credit score is a key component in your ability to be approved for a car loan at a low interest rate. Learn four steps you should take before you begin shopping for a car that may end up saving you thousands.
Whether or not You Believe Credit Repair Works, You are Correct
By: Stuart Hunter | 25/06/2008 | Credit
Credit repair works for those people who are willing to devote the time and resources towards fixing their credit reports. Those people who do not believe in credit repair will never see the benefits it can provide.
Avoid a Credit Repair Scam by Understanding Croa
By: Stuart Hunter | 17/06/2008 | Credit
The Credit Repair Organizations Act (CROA) helps protect you from a credit repair scam while also allowing you to receive help with your credit repair efforts. Understanding the basics of CROA is a good starting point when shopping for a credit repair service.
2 Ways the Credit System is not Like the Legal System
By: Stuart Hunter | 04/06/2008 | Credit
While the legal system has been set up to protect the rights of the individual, the credit system protects the profits of lenders. Guilty until proven innocent is not a luxury you have in the credit system.
6 Tips for Finding the Right Credit Repair Company
By: Stuart Hunter | 12/05/2008 | Credit
Credit repair companies have helped thousands of people legally and effectively correct their credit reports. Choosing the right credit repair company is the first step in getting help achieving your credit goals.
Tips for Finding the Best Credit Repair Company...and Avoiding a Credit Repair Scam
By: Stuart Hunter | 07/04/2008 | Credit
Getting started with repairing your credit is one of the very best things you can do for your financial well being and choosing the right credit repair company to help you achieve your credit goals is pivotal. What follows are tips and things you should look for when choosing the best credit repair company for you.
The Laws That Make Credit Repair Possible
By: Stuart Hunter | 31/03/2008 | Credit
There are a number of consumer protection laws designed to help protect you from being taken advantage of by the credit reporting system. It is these laws that state what sort of information can be on your credit reports, how long it can be listed, and what you can do to remove inaccurate and unfair negative credit listings.
Report Card for the Fair Credit Reporting Act
By: Stuart Hunter | 17/03/2008 | Credit
While the FCRA has made a positive impact on the credit reporting system, there are still a number of fundamental flaws in how your credit reports are constructed and how your credit scores are calculated. These flaws result in an unfair credit system that more often than not, punishes the consumer and rewards lenders.
|
|
Finance 
