Top 10 Credit Myths

Lexington Law Firm began its consumer law practice in the early 1990s when it redefined a fledgling credit repair industry by fusing strict regulatory compliance with innovative credit repair solutions. Today, Lexington Law continues to be a driving force helping clients take action on their credit, and remains the trusted leader in credit report repair.


Top Ten Credit Myths

1. When I pay off a past-due account, such as a charge off or a collection account, it will show "paid" and will no longer be negative.
2. If I succeed in deleting a negative item, it will just come right back on my credit report.
3. There are negative listings, such as bankruptcies and foreclosures, that are impossible to remove from the credit report.
4. Disputing the credit report is easy and any consumer can do it himself for the price of a few postage stamps.
5. If I declare bankruptcy, I can begin my credit report all over with a clean slate.
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.
7. 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.
8. If I build enough good credit, it will offset my bad credit and make me credit worthy.
9. I can improve my credit score by closing down some credit cards.
10. It is illegal for creditors to take a negative, accurate listing off my credit report.





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 no longer be negative.

It is quite difficult to restore your credit without somehow satisfying your outstanding debts. However, paying an outstanding, delinquent debt you will change the account status to "paid collection," "paid was late," or "paid was charged off" - which will still stand out as a very negative listing. When you have outstanding debt, it is almost always prudent to seek professional help so that 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 thousands of times by Lexington Law Firm. Negative items, such as 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 tax liens 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 your are 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 the 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: 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 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. 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 will 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.



Entire contents © 2008, Lexington Law Firm

Make More than Just Your New Year's Eve Rock: Six Ways to Take Charge of 2009

As the year comes to a close, it's time to think about what you want next year to look like. Stephen Covey, one of the most prolific leadership authors of our time, says there are six things you can do right now to make 2009 your best year ever:

1. Be proactive.
It's more than just taking initiative. It means being responsible for your own life. Empower yourself to lead and spread your influence no matter what position you hold.

2. Sharpen the saw.
Decide what's truly important. Sharpen your saw early in the day by learning to say no to the unimportant and yes to the highly important.

3. Seek to understand before seeking to be understood. It's human nature to want to be understood, but when both parties are trying to be understood, neither party is listening. By making the investment to understand the other party, you can magically transform the course of your conversations.

4. Begin with the end in mind. Start today with an image of the end of your life as the frame of reference by which everything else is examined. With a clear idea of where you are going, examine everything in the context of what matters to you most.

5. Develop a vision mission statement. Get a deep sense of your life's mission, purpose and value system, then establish your goals and a system of accountability that keeps you on track.

6. Think win-win.There is enough success for everyone, so don't view another person's success as success achieved at your expense or exclusion.

More about Stephen Covey on SUCCESS.com.

You Too Can Host An Inaugural Bash!

Dear MoveOn member,

Think of Barack Obama giving his inaugural address, surrounded by millions of the people who worked to elect him. Really, stop and imagine it. Does it make you smile? Us too. Does it make you want to celebrate? Good.

Because we're organizing Inaugural Bashes that night in cities across the country and we want you to come—in fact, we want you to host. The Chicago Inaugural Bash could be an informal party in a friendly local bar or restaurant, a smaller get-together at your house, or an elaborate Inaugural Ball—it's up to you.

The important thing is that we come together to kick off this new progressive era. Can you host an Inaugural Bash so the folks in Chicago have a place to celebrate? Click here to register your event:

http://pol.moveon.org/event/events/create.html?action_id=158&id=15305-14621121-Wt6cTcx&t=3

These parties are being organized with MoveOn.org Civic Action—which means it's fine to hold your party in a bar or restaurant. So if you have a friendly local bar that you think would be a great venue, give them a call to ask if they'd be OK with your throwing a party. (They'll probably appreciate all the extra business on a Tuesday night.)

Having your party in a bar or restaurant means more people can attend, but holding your event in a more private space, or at your home, is great too. And if you're not sure yet where your party will be, that's fine—you can still sign up to host now.

Once you've found a venue, hosting a party is really easy. We'll invite other MoveOn members in your area, provide all the materials you'll need, and offer some ideas for fun things to do at your party.

Millions of people will be gathering in Washington, D.C. on January 20th, but there are millions more around the country who helped make this day possible. Can you sign up to host an Inaugural Bash in Chicago so folks near you have a place to celebrate, too?

http://pol.moveon.org/event/events/create.html?action_id=158&id=15305-14621121-Wt6cTcx&t=4


Thanks for all you do.

–Daniel, Adam G., Noah, Marika and the rest of the team

Does Couples Counseling Work?

By Molly Triffin

Are you skeptical about the benefits of couples counseling? Our checklist may be able to help you determine if counseling would work for you.

Rumor has it that after seeing a couples counselor two years ago, Madonna and Guy Ritchie posted a list of relationship guidelines on the wall of their Manhattan apartment. A few of the reported rules: Guy must work to "enrich his wife's emotional and spiritual well-being" Guy must set aside time to read Kabbalah texts with his wife; both parties must "not use sex as a stick to beat one another."

Despite these meticulous measures, Madge and Guy still decided to split. And that begs the question: Does couples counseling really help? "Ultimately, if you really love the person, it's worth it to pull out all the stops," says Debbie Magids, Ph.D., author of All the Good Ones Aren't Taken. "But at some point, if things aren't getting better, you have to reassess."

If you're in a long-term relationship and having serious issues with your guy, you may want to consider going to therapy together (it costs about $150 to $200 a session, on average). Take a look at the checklist on the next page. The more questions you answer yes to, the greater the possibility that counseling could work for you.

Do the good times outweigh the bad?
If you enjoy being with your man the majority of the time, don't call it quits just yet.

Can you forgive him?
When trouble stems from a betrayal, such as cheating, it can be tough to move past that. But in order to have a strong relationship, you must be able to let go of the resentment.

Is the root of your conflict caused by an external force?
If an outside factor (for instance, he lost his job or there's an illness in your family) is putting stress on your relationship, the tough time is likely conditional and temporary.

Do you agree on the fundamentals of life?
You can find a happy medium when it comes certain disagreements, like how tidy you want to keep your pad. But others, such as whether or not you want to have kids in the future, are so fundamental that you need to be on the same page.

Is the relationship worth the work you'll have to put in?
Some couples are naturally more compatible than others, so their bonds are relatively easy to keep strong. Those who aren't as closely matched have to work harder to resolve differences of opinion and lifestyle. That doesn't mean your connection is any less wonderful, it just takes more effort to get to that point, so you need to be up for the challenge.

Source: Joanne Magdoff, Ph.D., psychologist in New York; Debbie Magids, Ph.D.
Reprinted with permission of Hearst Communications, Inc.