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Frequently Asked Questions About Credit Repair

October 26, 2009 | Credit Repair | 1 Comment
credit-report-faqs

Will a negative item on my credit report come back after I succeed in deleting it?

Credit bureaus will sometimes delete a negative listing temporarily if they haven’t heard from a credit grantor within 30 days.  If a credit grantor then reports a negative listing, the credit bureaus will often reinsert the negative listing on the credit report and reverse the credit repair.  However, many times, the creditor will fail to respond and the negative listing is permanently deleted and repaired.

Credit bureaus must follow strict procedures, per the Fair Credit Reporting Act, to notify you if they decide to re-report a listing on your credit report.    

Are negative items such as bankruptcies and foreclosures impossible to remove from the credit report?

There is no type of negative listing that can’t be removed and repaired from a credit report.  It has been done many times.  However, negative items such as unpaid debt and bankruptcy are very difficult to remove and repair.

Do I get a new credit report if I declare bankruptcy?

Bankruptcy is to the credit rating what a nuclear bomb is to the battlefield.  When an individual files for bankruptcy, every credit account that’s included in bankruptcy becomes an “included in bankruptcy” item. Bankruptcy discharge listings and filings will appear in the court records section of the credit report. With so many negative items are attached to a bankruptcy, it will be extremely difficult to remove all trace of the bad credit, if at all.  As a result, it is advised that you should avoid bankruptcy at all cost.

It is true that disputing items on my credit report is easy and can be done by myself?
 
It is true that disputing items on your credit report is very easy. However, getting results (and actually repairing bad credit) is very difficult, complex, and can be very infuriating. Repairing your credit is like repairing your car transmission or representing yourself in court; it is possible, but is it smart to do. It can be very time consuming and risky.

The Federal Trade Commission (FTC) receives more complaints against credit bureaus than any other type of business. As a matter-a-fact, if you call the FTC to report a complaint about a credit bureau, their phone system will prompt you to press one if your complaint is about a credit bureau or press another number if your complaint is about another type of business anything else.

Will my account show as “paid” and no longer considered negative when I pay off a past due account?

It is very difficult to repair your credit without taking care of your outstanding debts.  Paying off your debt will improve your credit rating by much, if at all.  Negative credit stays on your credit report for a maximum of 7.5 years, except for bankruptcy which can stay on your credit report for 10 years.

Paying off outstanding diligent debt will change the account status to “paid was charged off”, “paid collection, or “paid was late”.  This will stand out as a very negative item.  When you have outstanding debt, it is recommended that you seek professional help to settle it without further damaging your credit.  Sometimes, it is possible to negotiate a deletion of negative credit as part of the payoff.

Do creditors read my 100 word statement on my credit report explaining my side of the story and do they take my statement into consideration?

Most creditors do not look at the credit report when a credit application is completed.  They are most interested in the numerical credit score to determine whether or not they should extend you credit.  Your FICO score does not take into consideration the content of your statement.

However, the statement does very that some of the negative listings on a credit report are technically accurate.  This makes a credit repair job more difficult and the word statement should be the first thing to delete from your credit file.

Can I trick the credit bureaus into starting a new credit file under my name if I change my social security number or by using an EIN (Employer Identification Number) tax number?

This scheme is know as “file segregation” and is promoted by many credit repair operators.  Some individuals have been successful in using a false Social Security Number and have tricked the credit bureaus into giving them a new identity.  The scheme is totally illegal and lying on any personal information on a credit application is a federal crime.

The scheme is very complicated because you must change almost all identifying information about yourself and be very careful to never use the old information again.  Some people make the error of using their old information only to mix the old with new and get in trouble.  They will end up with both credit reports merging their information which then becomes suspicious to the credit bureaus.

Worst yet, some people have been charged with crimes, or terminated from jobs for using the false information.  

Will by bad credit be improved if I build enough good credit?

Any amount of bad credit limits your chances of being approved by a credit grantor. Most creditors do not look at your credit report but instead have a computer pull your credit report, rates your credit standing, income, indebtedness, and stability, generates a number (or FICO score,) then determines an acceptance or denial.
A simple one or two slow payment can trigger a credit card or personal loan denial. The smallest amount of negative credit will cause the interest on a loan (home, auto, personal, etc.) to skyrocket

Is it illegal for creditors to take an accurate negative listing off my credit report?

The fact is that the law demands that negative listings appear on your credit report for no longer than seven years. The credit bureau or credit grantor can choose to delete the negative credit listing whenever they like.

Will the Consumer Credit Counseling Service help me repair my credit, especially if I can’t pay all my bills?

CCCS or Consumer Credit Counseling Service is a nonprofit debt counseling service funded and controlled by the credit grantors and the credit bureaus. CCCS helps individuals who are over their heads in debt.
 
Often, CCCS provides beneficial services to consumers, however, because there is an allegiance between CCCS and the credit bureaus, you cannot reasonably expect CCCS to do anything that the credit bureaus would not like such as help you repair your credit.

If you decide to leave CCCS before finishing their program, they can list your failure to complete the program as a negative listing on your credit report (although this is rare.) When you participate in the CCCS program, your creditors will often note it on your credit report. If you want to keep your perfect credit, do not use a credit counseling service because their process will generally make you late on your bills at least 30 days, thus creating negative listings on your credit report.

Using a debt counseling program is a red flag for prospective credit grantors. Paying off your debts is a good start in the right direction, but it does not repair your credit.  Consumer credit counseling can really help you if you’re over your head and need some help.

How difficult is it to repair my credit?

Repairing your own credit by yourself is possible, however, the credit bureaus want you to fail and have experience in discouraging consumers.  However, some consumers have been successful in repairing their credit without professional assistance.  Keep in mind that the process can be very time consuming and you have to educate yourself of the process.  The process can take 12 and 18 months and take a lot of hours per month.  It is definitely a good idea to get some help from companies like Lexington Law.

 

 

 

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One Comment to “Frequently Asked Questions About Credit Repair”

  1. How Does Having Bad Credit Affect You? | Money Cake
    11:03 am on October 28th, 2009

    […] Frequently Asked Questions About Credit Repair […]

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