Credit and Debt Myths

These is a lot of false information on the internet about credit scores, credit repair, the fair credit reporting act, credit laws, debt and finance.

Here is a little list I made to clarify some of these fair credit myths.

  1. Amount of debt DOES affect your credit score.
    “It was only a $75 unpaid debt so it shouldn’t affect my credit score very much”.

    Fact: It does not matter whether you have a $10 unpaid debt or a $10,000 unpaid debt. An unpaid debt is an unpaid debt period. Any unpaid debt that has been reported to a collection agency will lower your credit score.

  2. They never sent me a bill.
    “It’s not my fault I didn’t get the bill.

    Fact: Believe it or not, sending you a bill is not required by any credit laws and is considered a courtesy.
    Regardless of whether you get your bill in the mail or not, it is your responsibility to pay you bills on time. If you didn’t get a bill in the mail, it is your responsibility to contact whomever you owe money to to make sure you are making payments on time. At the end of the day it is your own responsibility to make sure your bills are paid and on time. If you didn’t get a bill and you know you should have received one in the mail, it is your responsibility to pick up the phone and call whomever you owe money to to pay your bill on time.

  3. My paid off accounts will automatically disappear from my credit reports.

    Fact: Legally, you do have the right to fair and accurate credit reporting. If you did in fact pay off a collection, it should  be reported as “paid collection with zero balance remaining”.  If the paid off debt still shows up on your credit reports  30 days after you paid the debt off then it is your responsibility to contact all parties involved and this means you need to send a written letter to the creditor, collection agency – if one is involved and the three credit reporting agencies “Equafax, Experian and Transunion”.  After you send the letters your credit report should be updated within 30 days. If not then you may need a credit repair attorney to help you and the Fair Credit Blog is a great resource for finding an aggressive credit repair attorney that can help you. Just be careful and don’t fall for the credit repair scams that are out on the internet.

  4. Divorce and your credit.
    “I hired an experienced  Orlando Divorce Attorney and  got my divorce and the family law judge ordered my ex to pay these unpaid bills. They should not be on my credit report any more”.

    Fact: If your name is still on the credit line, you are still responsible for any accounts that have your name on them, regardless of what a family law judge rules.  Here is how this works: You made a deal with a lender or racked up your shared credit cards with your ex and your name is also on the bills. This means you agreed to pay any money you borrowed back. It is not the creditors fault if your marriage is successful or fails.

  5. Collections and zombie debt reappearing after you pay your debt off.
    “I heard if I paid my old collection – debt off it will come back and haunt me and lower my credit score”.

    Fact: Debt collectors do not generally re-age debts and if they do they are breaking fair credit laws. If this happens then you definitely will want  the help of a fair credit attorney to get involved and help you.

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