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Debt Elimination & Your Credit Rating - What's The Impact?
Utilizing Debt
Elimination will initially have a negative effect on your credit
rating. This is simply due to the fact that your debts or being
written off, and as your creditors and debt collectors are writing
off these debts, they will also be filing the respective reports
to credit bureaus.
However all good
Debt Elimination programs incorporate a solid credit repair
strategy into them to negate this initial impact almost
entirely. Generally these credit repair components leave no
trace of the written off debts on your credit record at all, and
in that respect, the actual impact on your credit rating is negligible.
These credit
repair strategies make use of your legal rights as a consumer
under the Fair Credit Reporting
Act. To summarize, this act
specifies the way in which credit bureaus must make entries on
your credit report.
Here's how this
strategy works...
Due to the high
volume of credit report entries made on a daily basis, credit
bureaus almost never verify the entries with the creditors
and/or debt collection agencies that filed them, as they are
required to be law.
However due to
lack of public knowledge about this practice, these entries
remain on your credit report outside the parameters of the
dispute mechanism. You see to most people credit repair means
disputing these entries & waiting for the creditor who
issued them to respond to your dispute.
Rather than taking
this approach, the Debt Elimination company deals directly with
the 3 credit reporting bureaus, getting them to remove all
negative entries which they did not verify before they entered
them on your credit report.
Since these
entries are not actually being disputed, the original creditors
who filed them do not receive notification of the removal as
there is never any communication with them.
In most cases this
credit repair strategy is permanent however in
the off chance that the original creditors were to find out and refilled
their credit reports, the chances are very high that the credit bureaus will still not
follow the law and verify the entries before placing them back
on your file.
And of course by
then you would have acquired your new loan or mortgage and would
be unaffected by this. Anytime you need to apply for credit you
can simply repeat this process if and when necessary.