Credit Repair Myths

When you start to research ways to repair your credit rating, you may find that there is a lot of contradictory information. The first step to mending your credit, or finding the right credit repair company, is to understand the difference between myth and reality.

Advertising

Just because a credit repair company is allowed to make claims in their advertising does not mean those assertions are true. If something in an advertisement strikes you as too good to be true, have it looked over by a financial or legal expert before contacting the credit repair company. One example of false advertising is a credit repair company guaranteeing they can raise your credit score by a certain number of points before they even see your credit report. Each situation is different, and until they see the report they have no way of knowing how much they can raise your credit score, if at all.

Varying Numbers

People sometimes believe that all three credit agencies have the same score for you. The truth is that your credit score varies depending on the reporting agency, and when you are checking your score you should check all three.

Misconceptions

A common misconception is that all you have to do is dispute an old credit account and the reporting agencies will remove it and improve your credit score. Credit agencies have 30 days to investigate a dispute, and if the account can be verified then it will remain on your report.

Paying Off Accounts

One common misconception is that if you pay off your accounts you should close them to raise your score. The truth is that paying off older credit accounts and keeping them open will help your credit more than closing accounts after they have been satisfied.

Time Frame

It is a myth that shopping for a better loan rate can lower your credit score, according to CNN. Excessive inquires to your credit account can lower your score, but a set of inquiries done over a 14-day period is considered to be only one inquiry event.