Many people have asked us how our debt relief process affects their credit report, which has lead to this Top 10 list of Myths we hear:

Myth #1: When I pay off a past-due account, such as a charge off or a collection account, it will show “paid” and will remain negative on my credit for 7 years.

It is true that unpaid, delinquent accounts will stay on your credit for 7 years, if you stick your head in the sand and do nothing about repairing it. Also, it is quite difficult to restore your credit without somehow satisfying your outstanding debts; which is why we put you in a position to settle your debts for pennies on the dollar. However, once the outstanding disputed debt is settled, through our process, we will use a proven credit repair process to change delinquent account status to “account in dispute” “paid collection,” “paid was late,” or “paid was charged off” or “paid in full”- which will still stand out as a very negative listing until the account is deleted through our credit repair process. When you have outstanding debt, it is almost always prudent to seek professional help so you may settle your debts, while creating a reasonable possibility of deletion of the negative listing at the same time.

Myth #2: If I succeed in deleting a negative item, it will just come right back on my credit report.

The credit bureaus have cleverly spread this myth through the news media and government agencies. In truth, the credit bureaus will often temporarily delete a negative listing if they haven’t heard from the credit grantor after approximately thirty days. If the credit grantor reports late, say after six weeks, and then verifies the negative listing, the credit bureau will often reinsert the negative listing on the credit report. This is often known as a “soft delete.” Usually, though, the creditor simply fails to respond and the negative listing is permanently deleted. If the item is verified by the credit grantor, either before thirty days or after, the account may still be challenged again at some future time.

Myth #3: There are negative listings, such as bankruptcies and foreclosures, that are impossible to remove from the credit report.

There is no type of negative listing that hasn’t been removed from a credit report countless times by our credit repair process. Negative items, such as a bankruptcy or unpaid debts, are certainly more difficult to remove from the credit report, but this has more to do with the operational systems of the credit bureaus than with the severity of the bad credit item. For example, judgments and disputed charge offs are severely negative listings, yet are easier to remove.

Myth #4: Disputing the credit report is easy and any consumer can do it himself for the price of a few postage stamps.

Disputing the credit report is easy. Getting results from the credit bureaus is amazingly difficult, complex, and infuriating. Remember, the credit bureaus are primarily interested in protecting their profits. Investigating your challenge consumes these profits. Short of sparking a mass number of lawsuits, the credit bureaus seem to do everything in their power to discourage consumers from making progress with their credit restoration. Restoring your own credit report is like repairing your own transmission or representing yourself in court; it is possible, but you must decide if you’re willing to take the time and assume the risks of doing it yourself.

Myth #5: If I declare bankruptcy, I can begin my credit report all over with a clean slate.

Many bankruptcy attorneys do not adequately understand or explain the effects of bankruptcy to their clients. Stated simply, bankruptcy is to your credit rating what the nuclear bomb is to war. When you file for bankruptcy, every credit account that you decide to include in bankruptcy will become an “included in bankruptcy” account. Additionally, a bankruptcy filing and bankruptcy discharge listing will appear in the court records section of your credit report. Because so many negative items are attached to the bankruptcy, it becomes difficult to remove all trace of the bad credit. If at all possible, you should avoid bankruptcy.

Myth #6: If you are not satisfied with the results of your credit bureau challenge, you may file a “100-word statement” on your credit report explaining your side of the story.

Creditors will read your statement and will take it into consideration. To our knowledge, no known creditor considers information given in a 100-word statement. The statement only serves to verify some of the negative listings on the credit report. Make 100-word statements the first things you delete from your credit file.

Myth #7: I can create a Credit Profile Number by changing numbers in my social security number or by using an EIN tax number, I can fool the credit bureaus into creating a completely clean, new credit file under my name.

This scheme has proven to be complex, difficult, and illegal. Lying about any personal identity information on a credit application is usually a criminal offense. Using these “file segregation” schemes requires an enormous amount of coordination, not to mention personal risk.

Myth #8: If I build enough good credit, it will offset my bad credit and make me credit worthy. After all, I was only late a couple of times and only had a few charge offs.

Any amount of bad credit is devastating to your chances of being approved by a credit grantor. Most credit grantors never actually look at your credit report. A computer pulls your credit report, rates your credit standing, indebtedness, and stability, then spits out an acceptance or denial. Even one or two slow pays will usually trigger a credit card or personal loan denial. The slightest amount of negative credit will cause the interest on an auto loan to skyrocket. You’ll probably find that even a little bad credit, regardless of how much good credit you have, is an unacceptable barrier to credit approval.

Myth #9: I can improve my credit score by closing down some credit cards.

For starters, closing down credit cards usually leads to a significant decrease in the credit score. What’s more, consumers focus far too much on positive credit while negative credit still appears on the credit report. Negative credit effectively wipes out any amount of positive credit when the score is calculated.

Myth #10: It is illegal for creditors to take a negative, accurate listing off my credit report.

The law requires that these items remain on the credit report for at least seven years. When you speak with credit grantors, collection agencies, or credit bureaus, their typically under-educated staff may tell you all manner of such pseudo-legal nonsense. The law demands that negative listings appear on your credit report for no longer than seven years. The credit grantor or the credit bureau can choose to delete the negative credit listing whenever they see fit and are especially inclined to delete the items we request, as our client’s accounts have been disputed with the creditors for validity, and read “account disputed” on the credit file.

There is a lot of nonsense out there about how the credit system truly works. If there is any myth that you unfolded that turned your financial life around right please post here and let us know.