Credit report or credit history, in many countries, is a record of an individual’s or company’s past borrowing and repaying, including information about late payments and bankruptcy. In the US, when a customer fills out an application for credit from a bank, store or credit card company, their information is forwarded to a credit bureau. The credit bureau matches the name, address and other identifying information on the credit applicant with information retained by the bureau in its files. That’s why it’s very important for creditors, lenders and others to provide accurate data to credit bureaus. This information is used by lenders to determine an individual’s credit worthiness; that is, determining an individual’s willingness to repay a debt. The willingness to repay a debt is indicated by how timely past payments have been made to other lenders.
A bad credit report is no doubt, considered a real nightmare by everyone. If you still believe in myths about bad credit reporting, then here is a chance to know what is true and what is not.
- Credit report requests do not cause harm
Chances are that the more the number of requests for a credit report of an individual is, the greater are the chances of denial of credit.
- Paying off collection accounts will help the credit report
Your credit report will show collection or charge of accounts for seven years. Hence others will know the entire history even if it is paid or settled.
- Information on credit report cannot be changed
The opposite of this is true in reality. Details that cannot be verified within 30 days, or any inaccurate fact and information, which the creditor is responsible for, can be altered.
- Credit report agencies are government authorities
Credit report agencies have no authority and are expected to comply with certain government laid standards. They are just companies who are doing their business of buying and selling information to make a profit.
- Bankruptcy is nothing but starting afresh
This is not true as bankruptcy indicates negativity in the credit account. The court record is always attached which will always stay and is indeed a detriment for future credits.
- Credit repair process is a complicated one
It is not very complicated although an attorney’s assistance is always helpful in setting things straight, but it is not always the case. You can also do the repair provided you are familiar with the federal laws and regulations.
- Removing truthful information from the report is illegal
The Credit reporting agency is not required to remove any accurate information from the file unless it is outdated. But it is not stated that it cannot.
- Credit repair is not legal
Creating a new identity or a new account is illegal but it is very much legal to do credit repair provided that it is in accordance with federal laws.
- Credit repair does not work
Credit repair is nothing but disciplined spending and borrowing which should always work and a great number of individuals have benefited from credit repair.
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