Your credit report is extremely important in generating your credit score. In spite of the importance of credit report, many people are unaware of how credit reports can be damaged or repaired. Myths and misconceptions about credit repair are quite prevalent. You should be aware of credit repair facts so that you don't face trouble later on regarding your credit reports and scores.
Here are 5 common misconceptions about credit repair:
1. Credit can be repaired in no time
The companies which offer you provisions for repairing your credit instantly are mostly scam companies and can lead you to trouble. These companies usually obtain a new tax identification number for you, that is legally reserved only for businesses. But if you use this number instead of yours, you may fall into legal trouble and be charged for fraud. Moreover, your personal information can be stolen for identity theft.
2. You are unable to fix bad credit
Despite of all the advertisements about credit repair process and credit repair agencies, there are some who believe that bad credit can't be truly repaired. This is an absolute misconception. All negative items can be dealt with though it may take a long time and regular repayment of due bills. In addition, you should pay off all your older debts and stay current on the new bills for your credit score to improve with time.
3. You cannot check your own credit report
Contrary to what many people believe, you can actually check your own credit report and that too free of cost from the three major credit bureaus Experian, Equifax and Transunion. If you do it through a proper government agency, many places allow you to check your credit once or more annually.
4. Credit repair agencies have Government authority
It is a prevalent idea that credit repair agencies are empowered with governmental authority. In reality such empowerment does not exist. Credit repair agencies and credit bureaus are like any other private business that deal with buying and selling of products to generate profit. No special authority is bestowed on them.
5. Enquiries have negative impact on credit report
Inquiring about your credit score is generally known as soft enquiry. This does not affect your credit score negatively. However, if multiple creditors pull out your credit reports in order to approve your loan request, it will affect your credit score negatively.
You should know that you can repair your credit report by two ways. The first way is by disputing the inaccurate negative items on your credit report and the second way is by adding more positive information to your credit report in order to offset the negative ones.