Paying an charged off collection debt 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 that is almost the same as if you didnt pay it.  

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.  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.

Many bankruptcy attorneys do not adequately understand or explain the effects of bankruptcy to their clients. Bankruptcy will lower your credit score if you had good credit when you filed.  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.  

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 in kentucky it is a felony.  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.

Any 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.  Even a slight 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.

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 and especially recent items have a greater effect and effectively wipes out most  positive credit when the score is calculated.

The law requires that these items remain on the credit report for at least seven years. Credit grantors, collection agencies, or credit bureaus, their typically under-educated staff are not lawyers and 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 although credit reports can make mistakes. The credit grantor or the credit bureau can choose to delete the negative credit listing early and are required by law to remove it after 7 years.