6 Myths About Bad Credit Repair

I decided to make this page about repairing bad credit because there was a point in my life where my credit, due to lack of education prevented me from buying the house of my dreams and cost me thousands of dollars in additional interests on a car loan.

I began searching for an affordable credit repair company. I quickly discovered they we just too costly and decided to do it myself.

And for many consumers, searching for a bad credit repair service remains too costly and most are stuck with no solution.

Now, as a result of the these tough economic times, the banks are protecting themselves by instituting some shady practices, reducing credit limits because you don’t have a certain score and bleeding consumers of their hard earned money. Now it’s time we arm ourselves with the knowledge to control our own destiny!

Myth 1: I Can’t Improve My Own Credit

As with many things, we need help once in a while, but credit repair is certainly something that you can do quite easily on your own with a little work and time.

When I first looked at my credit report, I saw some late pays regarding my car, some medical bills that went unpaid, and some other “not so good” marks on my credit report.  I was upset, and thought “I need a professional repair company to help me with this! I don’t know how to do this on my own!” This all came to roost when I wanted to become a homeowner.  I had a new wife and she was ready to buy a home.  So Yeah, so I thought. How did I do it myself? I got educated… that’s it. And now, you are going to get the best education on how to repair, rebuild, and maintain your credit score.

After some time of taking a more in-depth looking into my credit report, I noticed some huge mistakes by either the creditor or credit bureau. These were not my mistakes, but the mistakes of “Credit Cops.” I found mistakes on multiple accounts, ranging from multiple late pays, wrong accounts, two closed accounts, when in fact they were open. Turns out, it’s estimated that anywhere from 75% to as many as 90% of credit reports contain errors.

Myth 2: You Can’t Fix Bad Credit

Wrong. Just because you have bad credit doesn’t mean that you can’t repair it. It may take longer to fix, but it is repairable. There are many fast ways to restore your credit, build positive lines of creditand get yourself back on the right track to good credit.

If you think a 560 score is bad, it is.  When I stepped into the mortgage brokers’ office with my realtor and was told there was no way I would qualify for a loan, I was thoroughly embarrassed.  He broke the news in front of my then wife, realtor, his assistant and the couple sitting at the next table waiting to see him.

Look, it was possible for me to accomplish this, so can you.  You simply need to educate yourself and the process becomes a simple one.

Myth 3: You Only Have One Credit Score

Not true.  There are three credit reporting bureaus, therefore there are 3 scores.  They are: Transunion, Experian, and Equifax.  All three use different algorithms to come up with three different scores.  What’s interesting is a different merchant use different reporting agencies.  While The Gap may use Experian, Home Depot may use Transunion.

Experian may show a score of 525 while Transunion may show a score of 560. It’s always good to know your score from all three bureaus. They can vary by as much as 80 points.

Myth 4: Checking Your Credit Too Often Will Lower Your Score

There are two types of inquiries (more details later in the book) that will appear on your credit report: hard and soft inquiries. Hard inquiries are from companies you are attempting to do business with.  You know, obtain a car loan, mortgage, cell phone service. Multiple inquiries of this kind will lower your score. Soft inquiries occur when you check your credit through an online service or even from companies who are trying to obtain your information to possibly send out credit card promotions.  This type of inquiry does not harm your score.

Myth 5: Shopping For A Better Loan Will Lower Your Score

This is a pretty common myth.  Let’s say you are looking to buy a car.  You go visit dealership #1 and during the investigative process they check your credit profile.  You discover you don’t like to terms and you visit dealership #2.  If dealership #2 checks your credit profile, the two inquiries will only appear as one, as the inquiries are of the same in nature and they are within 12 calendar days of each other.

There is one exception.  Credit cards

Myth 6: I Must Remove All Negative Items To Improve My Score

This is false.  While you want to improve on the negative items, building new positive credit is just as important.  Negative items removed will improve your credit score, but adding positive credit will increase your score faster and will raise it higher as well.