Myth# 1: Charge- Offs Can' T Be Deleted From Your Credit Report

Category: Finance, Credit.

If you' ve recently found yourself eyeball deep in debt you' re not alone. While neither of these two are very pleasant, the bigger problem usually comes from consumers dealing with them improperly making a bad situation worse.

Today's consumer carries more debt then ever before, and as anybody dealing with debt problems knows, big debt means two bigger problems- debt collectors and credit score problems. Below are the top five myths about credit repair that will help you recover from your credit and debt problems faster then you may have thought possible. False. Myth# 1: Charge- offs can' t be deleted from your credit report. Charged- off debts are deleted everyday. You' re going to have more luck deleting a charged off account from a smaller retailer or collection agency then you will a larger bank in most cases.

It doesn' t mean it's going to happen every time, but it does happen. Larger banks have a lot of red tape they have to go through to get special requests such as deletions obtained. At the end of the day collection agents want your money and are usually more willing to delete accounts if they' re going to get paid. Whereas collection agents in many cases can make their own calls in regard to matters such as" pay for deletions" . Just make sure you get any agreements in writing before sending any money. False you can still be sued but it's easy to avoid. Myth# 2: You can' t be sued after Statute of limitations.

The statute of limitations( SOL) is the maximum time a collection agent can take legal action on a debt and it varies state by state. If the debtor reaffirms the debt. Once the SOL has passed there is only one circumstance where a debt collector can take legal action. This is a common mistake we see consumers make and many times it's from the advice of a mortgage broker. If you' re trying to repair your credit and the SOL has passed I wouldn' t waste my time settling or making payments. If you make a payment or a promise to pay in writing, your debt can be re- aged and the SOL starts all over again.

It is however a good opportunity to pay for a deletion if you' re in a financial position to do so. Myth# 3: A Paid In Full Collection is Better Then Settled. Collectors know they have very little recourse and are much more likely to do whatever they can to recover anything at all. False. Paying off an old collection or charge off is going to do very little if anything to improve your credit score. You' re going to get varying opinions on this one but with all things considered, I just don' t see the benefit in most cases of paying in full vs. settling and here's why.

It's the notation" collection or charge- off" that's doing the damage and they don' t go away by paying them off. The only time I would consider paid in full is if they were willing to delete the tradeline. Settled for less then full amount however will have about the same impact as a paid in full collection on your credit score, but you' re only paying. 50 cents on the dollar in most cases. If they' re not, you might as well save some money if you' re going to end up with the same net result. False: Another almost true statement and one the FTC won' t agree with, but I' m just stating the facts. Myth# 4 Accurate Information Cannot Be Removed From a Credit Report. The Fair Credit Reporting Act states that any information a consumer feels may be inaccurate or misleading the credit bureaus must verify it within a reasonable amount of time( 30 days) .

Again, we don' t recommend you dispute items you know to be true, but facts are facts. If they cannot do so, the item must be removed. Myth# 5: Credit Counseling Lowers the Amount of Debt You Ultimately Pay. In my opinion, Credit Counseling is a horrible mistake for people facing financial difficulties. False. On the surface it appears to be helping because your monthly payments are lowered.

Let's say your payment is currently 6000 for the next 24 months. The fact of the matter is that in most cases it is lowered because they are stretched out over a longer period of time. Under credit counseling your payment may drop to say 3500 but for 48 months. While it may give you that immediate relief making it appear as a feasible solution, in reality its only digging the hole deeper.