Is the question "how to fix my credit report " lingering at the back of your mind? The growing significance of your FICO goes beyond shopping for houses and luxury cars. Creditors are no longer the only people who are interested in your three digit credit score. Employers, landlords and insurers are also pulling your credit file in order to decide the fate of your application. The growing importance of your FICO makes having a good credit score a simple necessity.
When it comes to credit repair, there are a lot of misconceptions about what's hurting your score and what's not. Let's take a look at the most popular myths associated with collection agencies.
1 Myth # 1 You always have to pay your collection bills.
Let's say you have a collection account from a medical bill that is 2 years old. Under the FCRA and the FDCPA you have the right to challenge the legitimacy of every collection bill that comes to you. It's called debt validation. Collection agencies are required by law to cease any collection activities until they validate the debt. Since most of your debt got resold to various debt collectors along the way, you might be surprised to find that most of them don't have the proper paperwork. Never pay a collection until the debt has been verified.
2 Myth # 2 You have to pay your collection bill IN FULL.
Wrong! Collection agencies pay literally pennies for every dollar that you owe. The amount they pay depends on the age of the account (5,6 cents per dollar for recent accounts or penny or less for older and out-of-state accounts). In other words, collection agencies are still making a pretty handsome profit out of you even if you settle for 20% or less of the total amount. Always aim for the minimum possible settlement amount.
3 Myth # 3 Collection agencies have the right to call you anytime.
Wrong! If you want collection agencies to stop calling you, you just have to send them a cease and desist letter and state that they are only allowed to contact you via postal mail.Under the Fair Debt Collection Practices Act collection agencies are also forbidden to call you after 9 PM and before 8 AM (FDCPA, sec 805), use harassment or abusive language (FDCPA, sect 806), claim to garnish your wages, seize property or have you arrested (sec 807). Violation of these clauses gives you the right to sue.
The case of the collection agencies is just one example that the more you know about the credit system, the better your chances to repair your credit score. There are many little tricks and credit secrets that will take you to the land of "good credit" faster than you thought possible. The answer to the question "how to fix my credit report" is simple-gain knowledge and start thinking outside the credit box.