1. The credit bureaus are… a branch of the government, infallible, or otherwise above reproach.

The credit bureaus are publicly traded companies in business to impress stockholders. They are not government agencies. In fact, they are one of the most heavily regulated industries. The strict regulations stem from a public outcry of abuses and mistakes. A recent survey by an independent research group revealed that 70% of credit reports contained mistakes or errors. The amount of errors has lead to consumer protection legislation (FTC) that allows consumers to challenge the bureaus and force the removal of inaccurate, outdated or unverifiable information.

2. When I pay off a past-due account, such as a charge off or collection account, will it show “paid” and no longer be negative?

It is difficult to fully restore your credit without paying outstanding debts. However, paying off a debt can actually hurt your credit.
Negative items on your credit report are allowed to stay on your credit report a maximum of seven (7) years, except for bankruptcy that can stay for up to ten (10) years. When paying an outstanding debt, you will change the account status to paid collection, paid charge-off, satisfied judgment, or paid “was xxx days late”. This is still considered very negative and appears as though you had to be strong-armed by the credit

bureau to pay the account. It is almost always helpful to have a professional assist so as to not further damage your credit by trying to do the right thing.

There is no type of negative listing that has not been removed from a credit report- however BKS Judgment Taxliens are more difficult.

3. If I build enough good credit, it will offset my bad credit

Any amount of bad credit is devastating to your chances of being approved by a creditor. The approval is almost never in the hands of a human sitting across a desk from you. It is a computer achieving a point total. The slightest amount of negative credit will cause any loan interest rate to skyrocket. Generally, even a little bad credit (regardless of the amount of good credit) will cause you to be declined.

4. Nonprofit organizations like Consumer Credit Counseling Service (CCCS) can help me restore my credit

Nonprofit debt counseling services assist people who are over their heads in debt and are seeking an alternative to filing bankruptcy. CCCS are funded and controlled by credit grantors and credit bureaus. When you are working with CCCS your creditors will often note this on your credit report. This is a big red flag for prospective credit grantors- treated the same as Chapter 13 bankruptcy. Some of the very worst credit reports that CCR sees are or have been consumers in the CCCS or similar programs.