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If you think that when you pay off an old debt this will remove it from your credit report, you need to think again. It's just not true. Another fallacy is that if you reduce the balance on a past-due debt to zero this will improve your credit score. The fact of the matter is if that old debt shows up as a collection account, the amount of money you owed is usually irrelevant for FICO scoring purposes. This means that paying off an old debt that’s gone to collection won't help unless you can convince the debt collection agency to stop reporting it. If you really want to improve your credit score, you should pay off your most recent defaults first and then see how much that improves your score.
Credit repair is always a fraud
You may have read a lot of bad things about credit repair outfits and many of them are true – some are rip-off artists. But not all of them. There are times when it does make sense to hire someone. For example just trying to read a credit report can seem as if you were reading something in a foreign language. You might get the gist of what the report says but may not feel you understand it completely and are missing out on something. If you are feeling this way, you might hire someone to help but there are also ways you could educate yourself. For example, Experian Credit Educator will give you a 20-minute, one-on-one phone call with an agent who will do a complete walk-through of your credit repair components for just $30. He or she will also provide insights that could help you make better credit management decisions in the future. You can also practice some do-it-yourself credit repair by disputing late payments as you will learn by watching this video.
If you dispute an item, credit bureaus must investigate it within 30 days
It's true that the federal law mandates that credit bureaus investigate any complaint you make regarding an error on your credit report and then respond to you within 30 days. But, unfortunately, there is a loophole. The Fair Credit Reporting Act says that the credit bureaus don't have to investigate any disputes that they feel are "frivolous or irrelevant." This means they can review your dispute and then refuse to investigate. They can even do this based on the format of your letter. These agencies also often reject the techniques used by many of the credit repair firms such as using or disputing the same information over and over again. The best way to avoid the chance that your dispute will be discarded is by writing the letter of dispute yourself using your own words. And, of course, you should include copies of any relevant documents you have that support your position.