The Truth about Common Credit Myths
If you are interested in learning how to repair your credit, then you will want to read on. We will be discussing two of the most common myths that people have about credit.
Myth: My credit score will go up if I pay off delinquent accounts.
Paying a recently delinquent account off can help your score, but if you pay off an older account, you may find that your score goes down. This obviously isn’t what you want when you are working on credit score repair! The reason that your score goes down is that paying a collection on will renew the date of last activity. Accounts with recent activity impact your credit greater than accounts with an older date of last activity. This means that a paid collection with the date of last activity of last month will lower your credit score more than an unpaid collection with the date of last activity five years ago. To make matters worse, paying the collection means that the account will stay on your credit file for seven more years.
For this reason, if you’re going to pay off old collections you need to call the creditor and request a pay for delete. What you want is a letter from the creditor saying that they will remove all negative history on the account in exchange for you paying the account in full. Be careful here! Many creditors will try to word letter to say that they will report the account as paid. This is that what you’re looking for. What you want is a letter that specifically says that the account will either be completely remove your credit file or the all negative history of the account will be removed. Never make a payment prior to getting everything in writing.
Myth: Accurate information is impossible to remove from my credit file.
While no credit repair company can guarantee that they can help you remove accurate information from your credit report, this doesn’t mean that you can’t get accurate information removed. When you dispute information on your credit report, the creditors have 30 days to respond. If they fail to respond in this time frame, the account must be removed from your credit file. This happens regardless of yet accuracy of the information. By following the same process you would when fixing credit report errors, you may get accurate information remove.
Now, this doesn’t mean that this is a tactic that should be the sole focus of your credit repair process, but it in certain situations it can help you boost your score.
Posted: December 8th, 2009 under Debt Relief Programs.
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