Common Credit Myths

Don’t let credit myths derail your efforts to build and maintain healthy credit for the future. Below, we’ve put together a list of common credit myths to avoid when working to build healthy credit.

Myth #1: When You Pay A Collection, The Collection Agency Has To Remove It From The Credit Report

When you pay a collection, the creditor or collection agency is not required to remove the derogatory information from the credit report. To make the matter worse, by paying that collection you may have reset the seven-year statute of limitations, extending the amount of time the collection will stay on your credit report. The only exemption is that starting July 1, 2022, the credit bureaus will not allow paid medical collections to remain on credit reports. If you have nonmedical collections, proceed with caution when trying to find a resolution to avoid further negatively impacting your credit health.

Myth #2: The Credit Bureaus Have Your Best Interest In Mind

The credit bureaus are for-profit, multi-billion dollar companies who collect information on consumers, package it, then sell it to hundreds of companies and industries. Between January 2020 to September 2021, the CFPB received over 700,000 complaints against the credit bureaus. That’s more than 50% of all CFPB complaints in that period of time.

Myth #3: A Creditor Is Required To Fix Their Own Mistakes On Credit Reports

Unfortunately, this too is a myth. As a consumer, the burden of proof is on YOU to resolve mistakes, errors, or FCRA violations on your credit report, not the other way around. If a collection agency or creditor lists an incorrect balance, date, or account type, it is your responsibility to dispute or investigate that account to be fixed.

Have questions? We’re here to help! Contact a team member today to learn more about how you can build healthy credit and reach your credit goals!