Credit Reporting Agencies Are Not Your Friends

There are multiple credit myths and rumors that surround the realm of credit reporting. Some are urban legend, and have become so widely disseminated that they are taken as gospel; others are deliberately encouraged by lenders to terrorize or cajole debtors into compliance. The following is a compilation of the most common credit myths concerning your credit file, and the reality that all consumers should be aware of. Myth: Credit reporting companies are subsidiaries for or working on behalf of the federal government.

This belief is fostered by the fact that creditors make such a big deal about "registering" you as a debtor with a credit reporting agency that the power of the agency itself becomes inflated. In fact, credit reporting companies are nothing more than mega businesses and their true subsidizers are the banks and finance companies.

Myth: If you pay a bad debt, the negative report will automatically be removed from your credit immediately. This is a tactic used by unethical bill collectors to get you to pay your debt, and 9 times out of 10 it is a flat out lie. Myth: You have to sign up for a credit monitoring service to get a free credit report. This one is just ridiculous, and has been picked up by hundreds of companies trying to sell "credit protection" packages.

They offer you a free credit report through their website and then sign you up for a monthly automatic charge for an overpriced, basically useless "credit alert" program that you can duplicate simply by taking reasonable precautions. Don't be fooled. You are entitled by law to a no strings attached, once a year, completely free report from each of the three major credit reporting companies. Myth: Trying to get stuff removed from your credit report is illegal. Again, this is just not true.

There are illegal and unethical ways to tamper with your report, but many people have incorrect or outdated items on their report and it is perfectly legal to try to have those removed or updated. The steps to accomplish this are easy, and you can do it yourself so don't waste money on a "credit repair" company that claims it can restore your credit for a huge fee.

Myth: Credit Reporting agencies are required by law to keep negative items on your report for at least seven years. Actually, the Fair Debt laws state that after 7 years credit reporting companies are required to remove adverse reports - and nowhere does it say that these can't be taken off earlier.

The credit reporting agencies perpetuate this myth themselves so people will not ask them to remove stuff. Myth: Credit reporting agencies strive to keep accurate reports. In what alternate universe, Again, a credit reporting agency is not an agent of the government, and has little interest in helping anyone out or motivation to be accurate.

They are in business to make money, and they make it from the lenders. They have a vested interest in reporting whatever the creditors tell them because the creditors pay them to, and they double dip by selling this personal and private (and often inaccurate) information to other lenders and agencies as well. They have no vested interest in removing items, or in helping you at all.

Now that you know what credit myths to watch out for, you can take steps to review your credit and begin to correct any discrepancies. Unfortunately, credit reporting agencies do hold a lot of power over the average American citizen, and it falls to you personally to make sure that you are not being taken advantage of or wrongfully portrayed.

Here is what you need to know about payment protection insurance. What Is Payment Protection Insurance, Payment protection insurance (PPI) is a form of insurance to make sure that borrowers can keep up repayments on mortgages, loans, credit card, store cards and other financial products if they face financial hardship.

Why Would I Need PPI, Any or all of these situations could make it difficult to keep up repayments. Payment protection insurance could cover repayments for up to 12 months in these cases, depending on the policy taken out. People in the UK are borrowing more and saving less and redundancies are often in the news. It takes longer and longer to qualify for state benefits, so without some form of insurance people might end up in court and might even lose their homes if they were unable to keep up repayments for long periods.

These are many of the reasons that sales people use to persuade borrowers to get PPI. It is worth noting that most policies have exclusions relating to medical conditions and drug and alcohol abuse. There is also usually a period of 60 to 120 days after taking out the policy during which time borrowers cannot make a claim. Payment protection insurance has often been slated for being unfair to consumers and there are some issues that borrowers should pay attention to.

For example, it is worth checking whether the cost of the insurance will be added to the amount borrowed. This would mean that you pay interest on the insurance as well. It is also worth paying attention to the actual cost of the insurance. This can vary quite widely, so borrowers should look beyond the low interest rate on a loan or credit card to see what the total cost of borrowing will be.

What most borrowers don't know is that they can take out separate insurance policies which will cover not just the particular financial product, but a substantial part of their income. This type of income protection policy may be a better bet if you usually make debt repayments from your earnings.

Identity theft is on the rise. It used to be something that we only hear about in the movies. That is no longer the case. Each year thousands of Americans fall prey to identity thieves and those that commit credit fraud. If you still think that there is no chance that it would ever happen to you then you are wrong. For all you know it may already be happening to you.