MYTH 2: Credit monitoring services offered by the credit bureaus and credit card companies will help you clean up inaccurate credit and help to stop inaccurate credit from being reinserted into your credit report.

REALITY: Not only will their services not block inaccurate credit data, but they will continue to disseminate that dirty data –oftentimes without notifying you –until you clean it up yourself. Many times the “monitoring” services they sell, only involve monitoring one of the three major credit bureaus that data is reported to (Experian, Equifax orTrans Union). Reports are usually sent to you on a quarterly basis, which means that erroneously reported credit data can go undetected for some time. Their services won’t notify you if someone applies for a driver’s license or opens new accounts using your name.

Here’s another firsthand account from a victim of identity theft: http://www.guardmycreditfile.org/index.php/content/view/672/

MYTH 3: People who pay their mortgages on time won’t have problems! If you do have a problem— you must have caused it!

REALITY: Credit reports are notoriously contaminated with dirty data –data that is used to calculate your credit score. These scores determine your credit worthiness, the interest rates you will pay on loans and the amount you will pay for auto and homeowners insurance. The recipe used to determine your credit score is based on the contents of your credit report, whether accurate or not. Your credit report can indicate that you did not pay your bills on time or it may include a myriad of mistakes of which you weren’t even aware. These credit reporting errors may include: having someone else’s data mixed with yours, closed accounts that don’t belong to you, ancient debts that were paid but are reportedly still owed, erroneous 30, 60 or 90 day late payments that were actually paid on time, or debts belonging to an ex-spouse, relative or someone other than you! - Continued

MYTH 4: Foreclosures only happen when you don’t pay your mortgage payments. If your mortgage company sells your mortgage, any payments you made to the former company will be forwarded to the new mortgage company. It’s not your responsibility to ensure those payments are accounted for.

REALITY: When you pay your mortgage on time, there is no guarantee that you’ll be safe from foreclosure and no guarantee that the payments you made to the original lender were in fact transferred properly to the new mortgage company. People who have blindly sent their mortgage payments without the aid of a monthly statement to confirm these transactions, can suddenly find themselves facing enormous penalties, forced foreclosures and years of battles trying to prove they paid on time.

For more information on “mortgage servicing fraud,” go to www.msfraud.org. And for a personal account of one woman’s mortgage fraud nightmare, go to:
http://www.lawhelp.org/documents/283401Rockbridge Advocate Oct 2005.pdf

MYTH 5: It doesn’t matter whether you order your free credit reports at www.annualcreditreport.com (the official website mandated by the Fair Credit Reporting Act), call their toll free number, or order your credit reports from one of the many free credit report websites.

REALITY: It does matter. There are website domains that appear to be authentic, but in reality are imposter sites. A study by The World Privacy Forum study stresses the importance of requesting copies by telephone as opposed to using websites. Their report "Call Don't Click: Why It's Smarter to Order a Federally Mandated Credit Report via Phone Instead of the Internet," documents at least 96 known “imposter” domains. Read the full report at:
http://www.privacyrights.org/media/CallDontClickUpdate.htm.

There are additional concerns about both privacy and ambiguous credit reporting fees. The Trans Union site appears by design to allow for consumers to have marketing information sent to them and have their private data shared. To avoid having private credit information shared, it is best to order reports over the phone where there is a specific option to not share personal information. There are also some ambiguous sections in the Experian and Equifax sites which make it confusing for consumers to differentiate between free and fee-based services.

For more detailed information on this topic see http://www.privacyrights.org.

MYTH 6: If it’s advertised as a free credit report, it must be free.

REALITY: Don’t believe everything you see and hear on TV.
In many cases, consumers who sign up for these “free” reports often don’t realize that they are also signing up for a credit bureau’s credit monitoring services. After being asked to supply their credit card info, they learn that they’ll be charged a fee unless they cancel the service within 30 days.

For a closer look at this issue, read the article, “Marketer of “Free Credit Reports” Settles FTC Charges” at: www.ftc.gov/opa/2005/08/consumerinfo.htm.

MYTH 7: If you are notified that you owe money for an old medical bill that was recently placed in collection, then you must be responsible for paying for it.

REALITY: Not necessarily. Why? Because sometimes old “zombie” debts are bought for pennies on the dollar by collection agencies even though they were once paid, and these debts can eventually end up on a consumer’s credit report, without their knowledge. It can be many years old and suddenly appear out of nowhere. Do not pay a bill that you have no knowledge of simply to make it go away. Instead, contact the company that claims you owe money and obtain the particulars of the debt in question. Find out the date of service and call your insurance company to find out if this debt was already paid by them. - Continued

MYTH 8: If I can’t fix my credit problems caused by someone else’s error...I can turn to the courts to hold them accountable.

REALITY: Not always! You may have waived your rights without knowing it...
Binding Mandatory Arbitration clauses are finding their way into countless contracts (including credit card agreements) which means if you have a problem, you can’t sue them. You must settle your disputes in arbitration and the arbitrator’s decision is final. If you signed any agreement or contract that carries a binding arbitration clause, you gave away your constitutional right to use the American court system to solve a disagreement, no matter how important the disagreement. - Continued

MYTH 9: Since I don’t know any experienced consumer attorneys in my area, I will have to handle my own legal case myself.

REALITY: Because the consumer protection laws are Federal laws, you can search for an experienced attorney nationwide. He or she doesn’t have to reside in your area. If you have documented your case and/or want an opinion as to whether or not your situation requires legal representation, a great starting point is to go to http://www.NACA.net. An attorney who chooses to take on your case will usually do so on a contingency basis, which means they only get paid when and if you do. Additionally, they can hire an attorney licensed in your state to assist them in your area.