Rampant Myths About Credit Reporting, Continued

The following is a continuation of our article, Rampant Myths About Credit Reporting.  We hope that this information is useful for you, and that you take advantage of the outstanding Fresh Start credit repair guide below.

Myth: Credit repair is too complicated to do myself. I would have to hire an attorney.

Fact: In some cases involving a stubborn situation, an attorney can be of great assistance. An attorney can also help with clarifying the finer points of your state's laws. However, you can accomplish most if not all of the legal and negotiation-based methods in this report yourself by becoming familiar with your federally given rights and how to enforce them, as well as other creative methods employed by consumers.

Myth: It is illegal to have truthful information removed from your credit report.

Fact: Congress has already set the precedent by making special provisions for the removal of correct information from individuals' credit files by fulfilling certain criteria. Congress realizes that dangling that carrot in front of college students encourages repayment of defaulted student loans. It should come as no surprise that creditors in other financial markets are hip to this. Let's face it; congress had to get the idea from somewhere. Right?

If

[Excerpted from Fresh Start: The Authoritative Guide To Consumer Credit Repair. Three more sections conclude Chapter One by thoroughly covering all the changes as a result of the most recent laws going into effect.]

you need more proof, read section 609(c)(2)(E) of the NEW Fair Credit Reporting Act that President Clinton signed in September of '96.

"...a consumer reporting agency is not required to remove accurate derogatory information from a consumer's file, unless the information is outdated under section 605 or cannot be verified."

Notice the wording above, "is not required to remove." It is very interesting that the law does not say that accurate information "can not" be removed, but only that the credit bureau is not required to. Now, there is law that says a creditor can not knowingly add wrong information to someone's file, but the subject of removing accurate information is mysteriously avoided. The truth is the FTC and the bureaus themselves spend a lot of money trying to convince consumers otherwise. Why? Lobbyists and money of course! It makes more work for the credit bureaus, thus increasing their labor costs. Bureaus save millions of dollars a year by convincing consumers that the consumer is virtually powerless. But congress worded things to leave the door open, and in at least one case drafted law allowing for it, specifically.

Fortunately, creditors make their profits by collecting from their customers, not reporting negative credit information. Many creditors, though, have an agreement with the credit bureaus that they will not allow a negative listing to be deleted upon settlement. Larger creditors, such as huge credit card companies or banks will require more pressure before they will agree to delete a negative listing, but virtually every creditor will give in with the right amount of convincing. Every creditor who reports to the credit bureaus can also change the information they report. In most credit organizations, there are several managers with the authority to make changes on the credit report.

Bottom Line: Anything a creditor is responsible for reporting and confirming, a creditor can change.