Does removing the reporting of a debt mean the debt is gone?

Oooh?!? Good question!!! Why yes, I thought so.  I really must stop talking out loud to myself, but when these questions come to mind I immediately want to share them with you.  So this is one of those that EVERY client asks me.  And I realized that not everyone knows this.  So today I am going to let everyone in on a little secret.  As with everything else in credit restoration the answer could be “yes” and/or “no”.

Now, you didn’t really think there was a straight answer to anything having to do with your credit score, did you?  The truth is that there are some rules that can help you know the answer to that.

First, did you pay the debt? (That is assuming that it was in fact your debt…which is NOT always the case as we have seen) If so, the creditor has no reason to report the paid debt to the 3 major reporting bureaus unless you ask them to do so.  Why would you ask them to do so?  Not all reported debt is bad.  For instance your 5 years of on-time car payments should be reported and stay on your report FOREVER.  So as we see, some debts should be reported.  More on this in another post.

Okay, you didn’t pay the debt, either because you didn’t know about it or you weren’t able to pay it at the time.  Most people, if asked will tell you that bad credit has to remain on your credit report for 7 years with a couple of exceptions (Chapter 7 BK or Tax debt).

Pssst, I am going to let you in on a secret, there is no law or statute that states that adverse credit MUST remain on your credit report for 7 years.  That is simply the longest time that it can be reported.  Naturally, a creditor or collection company is going to say whatever is necessary to get money from you, so as stories of Santa Claus and the Toothfairy have become “truth” for some, so has this misinformation.

Now, back to our question.  Maybe you really do owe the debt but you are able to show that it was misreported. Under the FCRA it must be legally and permanently removed.  Yeah!!!….but wait.  Just because it is not on your credit report, does not mean that it does not exist.

Other factors can play into whether or not you MUST pay a debt, such as your state’s statute of limitations.  But, it’s always best to take recent debt, especially less than 2 years old, and try to make arrangements for payment in exchange for removal of the item from your credit report.

Remember that just because you got it removed from a bureau report, the creditor usually has a longer memory.

We’d love to help you with these and any other credit issues.

Call (800) 811-3078