Credit is a very sensitive matter for people in this modern era. The credit regulates all of the tasks related to finance. So, when the matter is repaired, people start searching for information about credit repair out of fear of getting scammed or damaging their credit. Because of the fear of people, you can find many whispering about the credit repair process. Would you happen to know if these are true? No, these are myths.
So, you must know which are the myths about credit repair before starting your credit repair process. Let’s explore the myths.
Credit Repair is an Illegal Process
Some people believe that credit repair is an illegal process. However, the fact is that credit repair is a legal process, as long as you follow the guidelines set by the Credit Repair Organisations Act (CROA).
You Can Only Repair Your Credit by Hiring a Professional
There is a myth that to complete a successful credit repair process, you must hire a professional. However, you can repair your credit on your own by following the step-by-step process. You can get a free copy of your report from Annual Credit Report. Also, you can dispute errors from the credit bureau and negotiate with the creditors to get a better plan for fixing your credit score.
Paying Off Debts is the Only Way to Boost Credit Score
If you think that only paying off debts can erase all the negative marks from your credit report, and your credit score will increase because of that, then you need to get a reality check. Paying off debts is a necessary and beneficial step. Still, you must use your credit properly, make timely upcoming payments, dispute inaccurate information, and keep your old accounts open. These things boost your credit score togetherly, depending on your credit history.
Closing Old Accounts Can Remove All Negative Marks
Another common myth about credit is that closing old accounts can remove negative marks and boost your credit score. But in reality, the length of your credit history may lead to an increased credit utilisation ratio and a goodwill adjustment. Also, it builds a good reputation as a consumer. So, never close your old accounts.
Disputing Inaccuracies Removes All Negative Marks Instantly
Legally, negative marks stay in a report for 7 years. It can be reduced gradually through your actions, such as legally disputing inaccuracies, building timely payment habits, and proper credit utilisation. So, if any company guarantees 100% removal of negative marks, be cautious. They might be scammers.
A Perfect Credit Score Should Always Be Perfect
Credit scores provide us with lots of opportunities. Generally, a credit score of 850 is considered perfect. However, many lenders consider a score of 700 to be good, and above 750 to be excellent. You have to build good credit habits instead of chasing a perfect score. If you can build good credit habits, your score will be perfect automatically.
There might be other myths regarding credit. But behind all the myths, you need to find the truth.