The Attorney's Guide to Credit Repair

Maintaining good credit is important, but you must first have a good working understanding of how credit works, how your credit score is established and how the three major credit reporting bureaus function.

The myths about credit inquiry - if you repetitively apply for credit, the credit reporting agencies with look at you with suspicion. But not in all cases is this action suspicious. For instance, if you are making many inquiries for the same purpose, for example you are shopping for a mortgage or a car, then those inquiries, within a specific period of time, will be regarded as one inquiry.

Also, it will never hurt you to check your own credit. It is the credit applications (not just the inquiries) that will actually count against you. Another point to note is that inquiries against your credit file will only be kept on record for 6 months. In other words, there is just a 6 month statute of limitations on credit inquiries.

It is important to note that you permission is not required for a creditor to check your credit. If you apply for credit, the potential creditor, for example insurance company, a potential landlord, will be able to legally request a credit check without asking your permission.

It is widely felt that paying off all debts will immediately increase your credit score. That sadly is one of those credit repair myths. Even though it is better to pay off your debt as opposed to leaving it unpaid, you may still have delinquencies and missed payments on your record and they will continue to scar you credit report.

It could happen that paying off your debt may not even increase your credit score by even a point. What is good is that the past delinquency and late payments will be gone from your credit report after 7 years. However, not all negatives will be erased after 7 years. Chapter 7 bankruptcies will not be erased until after 10 years, and unpaid judgments could remain forever.

Many people believe that closing out their credit cards will benefit their credit score. This is in fact very harmful to your credit, and also may make it difficult to open new accounts later if you have previously closed open accounts. It your account is open, up-to date and active - it acts to help your credit

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The credit that is available but unused is counted as a positive and aids in determining your credit score.

There is much bad publicity, much deserved in many cases, regarding debt management services and credit counselors.

Many companies have set themselves up to be able to "fix your credit". Avoid like the plague any company that promises to do that. However, there are debt management services and also credit counseling agencies that are reputable and can offer assistance.

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