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Kimberly Washington, an expert credit counselor and manager of Full Faith and Credit enu­merates the Top Ten credit myths:

 

1. “When you pay off a past due account, such as a charge-off or a collection account, it will show ‘paid,’ and it will no longer be negative.”

 

Many actions affecting your credit score can be effectively managed. Inquiries, by way of exam­ple, even for the purpose of extending additional credit, adversely affect your score. Paying your bills late will, regard­less of whether they are ultimately paid, show up as a deroga­tory reference. Charge-offs (paying the creditor less than they are owed and allowing the creditor to reflect just that on your credit report) is much worse. Neither, however, is necessary, regardless of whether you are having tough times. If you are tight on money, call your creditors before your bills are due. Cut a deal up front, and confirm with your creditor that you expect him to refrain from reporting anything negative if you adhere to the agreement. Confirm that arrangement in writing. Extend that logic to the scenario where you must, for what­ever reason, negotiate an arrangement with a creditor to resolve a debt for less than you owe. Confirm, in writing, before you pay the reduced sum, that no charge-off will be reported against you.

 

 

2. “If you succeed in deleting a negative item, it will sim­ply come back on your credit report.”

 

This is not true, and if, for whatever reason, it does, you have the right to dispute, suc­cessfully, its presence. Remember, an improper derogatory reference on your credit report is slanderous, and the creditor or the credit bureau may be exposed to civil liability or worse. Document everything; keep good records. Remember, we are not victims. Don’t act like one.

 

 

3.“There are negative items, such as bankruptcy and fore­closure, that are impossible to remove from your credit report.”

 

Nothing is impossible to have removed from your credit report. Some items last longer than others, but everyone is entitled to forgiveness; and all derogatory references will ultimately be removed from your report. Others never have to be there in the first place if you use the tools we are providing you.

 

 

4. “Disputing your credit report is easy, and anyone can do it for the price of a few postage stamps.”

 

Remember the principal of fellowship, and be efficient with your time. Hire an expert to assist you while you focus on the actions that are within your core skill sets. Leverage your time like you leverage your assets to maximize the return on the time invested, and remember to invest rather than spend your time. Time is your most precious asset beyond your family, friends, and faith.

 

 

5. “If you declare bankruptcy, you can renew your credit like it never happened.”

 

You hear and read this myth adver­tised often. Certain types of bankruptcy can wipe out your debts, but nothing in federal bankruptcy law requires credi­tors to rescind negative remarks on your credit report follow­ing the filing, involuntarily or otherwise, of a bankruptcy. Forming a corporation or other entity and creating a new tax­payer identification number will likewise not eliminate the problems associated with a bankruptcy filing. Most creditors or potential creditors still require the social security number of the principal officer, director and/or shareholder, and when they run your credit, your bankruptcy will appear until removed from your personal credit profile.

 

 

6.“If you are not satisfied with the results of your credit bureau challenge, you may file a 100-word statement with the bureaus citing your side, and creditors will take your position into account.”

 

It is true that you can write 100 words on your credit report with your most eloquent prose, edifying the world about the severe injustice you suffered at the hands of the unfair creditor. That said, please remember that the entire credit reporting system is run by creditors who, together, designed and formed the system they feed to inform one another about good and bad credit risks as they see them. Your treatise will be, from their perspective, suspect and irrelevant. Save your eloquence for the conversation you are going to have with your creditors before derogatory references are reported against you.

 

 

7.“By changing numbers in your social security number or through the use of an employer’s identification number, you can fool credit bureaus into creating a clean, new credit profile for you.”

 

You could also rob a bank, and temporarily, if you do it just right, your money problems will be cured. That, like the foregoing myth, is a very, very bad idea. Attempting to defraud the federal government is a felony, and the penalties are far worse than the temporary burden of poor credit. Do it right. Seek the help and fellowship of professionals, and take your credit back.

 

 

8.“Enough good credit will obfuscate your bad credit.”

 

If only the dollar you saved paid off the ten you owed. Good credit is good. Get more of it. That said, we need to address and correct your bad credit, and endless good credit will not cure or even affect the bad.

 

 

9.“If you are having difficulty financially, a credit consol­idator will be of benefit to you.”

 

Credit consolidators are agen­cies hired by consumers to distribute money to creditors in sums or increments less than the creditors are owed. This, from the perspective of institutional creditors, is the kiss of death, similar to a bankruptcy or a charge-off. Often the con­solidator will, in addition to impugning your credit reputation by their very existence, allow, through their efforts, charge-offs as well. Just say no!

 

 

10. “It is illegal for a creditor to remove an accurate derogatory reference on your credit report.” Creditors can do whatever they want with the derogatory references they place on your credit report. They may likewise refrain from placing them if you are proactive and can convince them to do so.