8 Credit Repair Myths Debunked
Published on May 17, 2025 (Updated June 29, 2025)
Introduction
Misinformation about credit repair can hinder your financial progress. With 1 in 3 Americans affected by credit issues per CFPB data, debunking myths is crucial in 2025. At CreditMendNow.com, we provide clarity with expert insights to guide your credit repair journey.
This post debunks 8 common credit repair myths, supported by FICO statistics and real-life examples. Understanding the truth can prevent costly mistakes and boost your score by 50-100 points. Let’s separate fact from fiction!
Myth 1: Paying Off Debt Erases Negative Marks
Paying off debt doesn’t remove late payments or collections, which stay on your report for 7 years per FICO rules.
It improves utilization, though. Case: Tom paid a $2,000 debt, but a 2022 late payment remained; his score rose from 540 to 580 due to lower utilization.
Myth 2: Closing Cards Boosts Your Score
Closing old accounts reduces available credit and history (15% of score), often dropping it 10-20 points, per Experian.
Keep cards open. Example: Lisa closed a card, seeing her score fall from 620 to 605; reopening it helped recovery to 625.
Myth 3: Credit Repair Is a Quick Fix
Significant improvement takes 6-12 months, with FICO noting 70% of repairs require consistent effort.
Avoid scams promising instant results. Case: Mark avoided a $500 “fix” service, using on-time payments to reach 600 in 7 months from 550.
Myth 4: You Can Remove Accurate Negative Info
Only inaccurate data can be disputed; accurate marks stay per FCRA guidelines, says CFPB.
Focus on new habits. Example: Sarah tried removing a valid late payment but succeeded with a goodwill letter, boosting her score from 570 to 600.
Myth 5: Co-Signing Won’t Affect You
Co-signing ties your credit to the borrower’s actions; 1 in 10 co-signed loans default per CFPB.
Monitor closely. Case: John co-signed, and a missed payment dropped his 680 score to 640; he paid it off to recover to 660.
Myth 6: Debt Settlement Ruins Credit
Settlement impacts credit (100-150 point drop), but recovery is possible with new habits, per FICO.
Consider it a last resort. Example: Emily settled $5,000, dropping to 520, but rebuilt to 580 in 9 months with on-time payments.
Myth 7: Paying Collections Immediately Helps
Paying doesn’t remove collections; they stay 7 years, but negotiation can add “paid” status, per Experian.
Negotiate removal. Case: David paid a $300 collection, negotiating its removal, raising his score from 560 to 590.
Myth 8: You Need a High Income for Good Credit
Income doesn’t affect scores; habits do, with CFPB data showing 60% of 600+ scores from low-income households.
Focus on payment history. Example: Maria, earning $30,000, built a 630 score in 6 months with disciplined use of a secured card.
Conclusion
Debunking these 8 credit repair myths empowers you to improve your score by 50-100 points with informed actions. From avoiding quick fixes to mastering payment habits, the truth sets you free.
At CreditMendNow.com, we’re here to guide you. Explore our blog for more credit repair insights, and start debunking myths today!
Take control of your credit now—knowledge is your power!
