Your credit report and score can hold the key to your financial future. One mistake could possibly prevent you from getting a loan or an apartment. It’s important to understand what’s in your report and how it affects you. Here are some common myths about credit reporting.
Myth: You can pay someone to make bad things on your report “go away.â€
Reality: Services like this are more than likely a scam. According to the Federal Trade Commission, their attorneys say that they have never seen a legitimate credit repair company making claims to
- The company wants you to pay for credit repair services before they provide any services. Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed the services they promised.
- The company doesn’t tell you your rights and what you can do yourself for free.
- The company suggests that you try to invent a “new†credit identity–and then a new credit report–by applying for an Employer Identification Number to use instead of your Social Security number.
Myth: Employers can see your credit score.
Reality: Employers don’t have access to your credit score, only your report. If you’ve given written permission for an employer to do a background check, the package they receive will include information about your financial history. Employers receive a modified version of your credit report (known as an employment report) from the three major credit reporting
Myth: credit counseling will lower your credit score.
Reality: Participating in a debt management program through a credit counseling service is not considered a negative mark on your credit report. Before
Related link: 4 Credit Reporting Myths and Realities
Sheiresa Ngo is the consumer affairs editor at Black Enterprise.
For more on credit report myths, pick up the December 2010 issue of Black Enterprise magazine, on stands now.