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Can't I repair my own credit?
Yes, you can repair your own credit. But most people find that
they do not have the time, persistence, knowledge, or patience
to. Just as can do your own taxes, most choose to have a professional
tax consultant do them instead.
Why do Credit Bureaus not want me to use a credit
repair company?
Credit Bureaus will tell you that you can repair your credit
yourself. But it is YOUR RIGHT to choose a professional company
to help you. Dealing with Credit Bureaus is only one aspect of
credit restoration. Assistance with the best course of action
to deal with Creditors is not a service Credit Bureaus provide.
Credit Bureaus are in business to make money off of your credit
files, and it is not in their best interest to solve credit problems
that you have.
How long does it take to repair my credit?
Generally it takes 3-5 months for moderate credit problems to
be resolved and can take up to 5-12 months for major credit problems.
This is all dependant on the amount of cooperation from the credit
bureaus and the creditors.
Is disputing information legal?
Disputing any information on your credit reports is your right
(see the Fair Credit Reporting Act). Disputes must be true and
accurate and credit repair agencies cannot produce any information
that is not accurate to the best of client's knowledge. You also
have the right to negotiate with creditors to change or delete
what is on your credit report since they are the ones who decide
whether or not to delete or change any information they are reporting.
Legal credit repair agencies do not change or advise client to
change client's identification, social security number or any
other personal data in an effort to gain credit under a different
identity.
Should consumers try credit
repair on their own?
Disputing the credit report is easy. Getting results from the
credit bureaus is amazingly difficult, complex, and infuriating.
It is not a coincidence that the Federal Trade Commission receives
more complaints against credit bureaus than any other type of
business. Remember, the credit bureaus are primarily interested
in protecting their profits. Investigating your challenge consumes
these profits. Short of sparking a mass number of lawsuits, the
credit bureaus seem to do everything in their power to discourage
consumers from making progress with their credit restoration.
Restoring your own credit is like repairing your own transmission
or representing yourself in court; it is possible, but you must
decide if your are willing to take the time and assume the risks
of doing it yourself.
Does paying off past-due accounts neutralize
their negative status?
It is quite difficult to restore your credit without somehow
satisfying your outstanding debts. However, the act of paying
off a debt can actually hurt your credit.
Negative credit is allowed to stay on the credit report for a
maximum of seven years, except for bankruptcy which may remain
on the credit report for ten years. This seven year clock begins
ticking on "the date of last activity"¡in other
words, when the last action took place on the account. By paying
an outstanding, delinquent debt you will change the account status
to "paid collection," "paid was late," or
"paid was charged off" - which will still stand out
as a very negative listing.
Furthermore, you will create a new date of last activity on the
day you settle the account. The seven year clock will reset and
begin all over again. When you have outstanding debt, it is almost
always prudent to seek professional help so that you may settle
your debts without further damaging your credit.
Do negative items remain listed for at least 7
years?
When you speak with credit grantors, collection agencies, or
credit bureaus, their typically under-educated staff may tell
you all manner of such pseudo-legal nonsense. The law demands
that negative listings appear on your credit report for no longer
than seven years. The credit grantor or the credit bureau can
choose to delete the negative credit listing whenever they see
fit.
Does enough good credit
offset any bad credit?
Any amount of bad credit is devastating to your chances of being
approved by a credit grantor. Most credit grantors never actually
look at your credit report. A computer pulls your credit report,
rates your credit standing, income, indebtedness, and stability,
then spits out an acceptance or denial. Even one or two slow pays
will usually trigger a credit card or personal loan denial. The
slightest amount of negative credit will cause the interest on
an auto loan to skyrocket. You will probably find that even a
little bad credit, regardless of how much good credit you have,
is an unacceptable barrier to credit approval.
Does the CCCS help consumers restore credit?
Consumer Credit Counseling Service or CCCS is a nonprofit debt
counseling service that assists consumers who are over their heads
in debt. CCCS is funded and controlled by the credit grantors
and the credit bureaus. Often, CCCS provides a beneficial service
to the consumer. Because of the obvious allegiance between CCCS
and the credit bureaus, you cannot reasonably expect CCCS to do
anything that the credit bureaus would frown upon, such as help
you restore your credit. In fact, if you decide to leave CCCS
before you have finished their program, they can list your failure
to complete the process as a negative listing on your credit report.
When you participate in the CCCS program, your creditors will
sometimes (though rarely) note it on your credit report. The fact
that you resorted to a debt counseling program is a huge red flag
for prospective credit grantors. Remember, paying off your debts
is a step in the right direction, but it does not restore your
credit.
Does bankruptcy wipe the slate clean for a second
chance?
Many bankruptcy attorneys do not adequately understand or explain
the effects of bankruptcy to their clients. Stated simply, bankruptcy
is to the credit rating what the nuclear bomb is to war. When
you file for bankruptcy, every credit account that you decide
to include in bankruptcy will become an "included in bankruptcy"
account. Additionally, a bankruptcy filing and bankruptcy discharge
listing will appear in the court records section of your credit
report. Because so many negative items are attached to the bankruptcy,
it becomes very difficult to remove all trace of the bad credit.
If at all possible, you should avoid bankruptcy.
Should I apply for credit while in the restoration
process?
Do not apply for credit during the restoration period. Each time
you apply for credit, an inquiry is recorded on your record and
too many inquiries can be a cause for denial of credit.
Does paying a past due debt remove the debt from
your credit report?
Paying an old debt does not erase the fact that at one time you
were not paying it as you agreed, but it is possible to update
your payment history.
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