FICTION: The law states that bad credit must stay on a credit report for a period of 7 to 10 years.

FACT: There is nothing farther from the truth. There is no law that states that bad credit must remain on a credit report for 7 to 10 years. In fact, there is no law that states that creditors must report your credit history at all. The law states that accurate credit may remain on your credit report for 7 years. Bankruptcies may remain on your credit report for 10 years.

FICTION: When I pay off a past-due account, such as a charge off or a collection account, it will show "paid" and will no longer be negative.

FACT: The paying off of an old debt actually harms your credit. Negative credit is allowed to be reported for a maximum of 7 years. The 7-year clock begins ticking on "the date of last activity." By paying an outstanding delinquency account you will change the status to "Paid Collection" or "Paid Charge Off" and the 7-year old status begins again. By trying to do the right thing, you just bought yourself additional years of bad credit.

FICTION: If I succeed in deleting a negative item it will just come right back on my credit report.

FACT: The Federal Fair Credit Reporting Act clearly states that if an item is not verified within a 30-day period that such item must be permanently deleted from the credit report. Although not common, items sometimes reappear. However, when they do they can be removed instantly by notifying the credit bureau of their previous deletion.

FICTION: There are negative listings, such as bankruptcies and judgments, that are impossible to remove from a credit report.

FACT: There is no type of negative listing that hasn't been removed from a credit report thousands of times. In fact, there is not a court in the land that reports to the credit bureaus. The credit bureaus send employees to the different courthouses on a periodic basis to take down current information and add it to consumer files. When a Public Record item is disputed, the credit bureaus must send an employee to the courthouse to verify such information. Many times this cannot be done within the 30-day time period and the items are permanently deleted from the credit file.

FICTION: Disputing the credit report is easy and any consumer can do it himself for the price of a few stamps.

FACT: Disputing the credit report is easy. Getting results from the credit bureau is amazingly difficult, complex and infuriating. It is not a coincidence that the Federal Trade Commission receives more complaints against credit bureaus than any other type of business.

FICTION: If I declare bankruptcy, I can begin my credit report all over with a clean slate.

FACT: Many bankruptcy attorneys do not adequately understand or explain the effects of bankruptcy to their clients. Stated simply, bankruptcy is to the credit rating what the atom bomb is to war.

FICTION: If you are not satisfied with the results of your credit bureau challenge, you may file a "100-word statement" on your credit report explaining your side of the story. Creditors will read your statement and will take it into consideration.

FACT: I know of no creditor that will take your 100-word statement into consideration. A 100-word statement only serves to verify the negatives on the report.

FICTION: If I'm having trouble paying my bills I can go to Consumer Credit Counseling Service and they will help me to restore my credit.

FACT: A Consumer Credit Counseling Service or CCCS is a nonprofit debt counseling service that assists people who are over their heads in debt. CCCS companies are controlled by the creditors and the credit bureaus. The fact is that if you are in a CCCS program and it is reported to the credit bureau, creditors will treat you as if you were in a Chapter 13 bankruptcy. This is a kiss of death.

FICTION: It is illegal for a collection agency or creditor to change or delete a negative entry.

FACT: As stated earlier, there is no law that states that credit must be reported at all.

In today's society, a good credit rating is often times the difference between living well and just existing. Credit is no longer a matter of choice, but one of necessity.

Unfortunately, millions of Americans are now living in a form of "debtors prison" because they can't get a credit card. That means they will have difficulty renting a car, making a guaranteed hotel reservation, or ordering sports or concert tickets by phone or online. They may not even be able to participate in the "American Dream" of buying a home because they can't qualify for a home mortgage.

What was their crime? Possibly a personal or family illness, a job layoff through no fault of their own or just unintentional mismanagement of their finances.

Is it fair? We think not... In California, if you rob a liquor store you may go to prison for 18 months. If you sell drugs, you may go to prison for 2 years. If you commit manslaughter, you may go to prison for 5 years. BUT, if you lose your job and can't make your car payment, a repossession will result in ruining your credit for 7 YEARS.

If a foreign nation, or even our own nation, needs to borrow money, they simply do so, usually promising to at least try to pay the interest, and by doing so trillions of dollars are loaned each year, with the empty promise of re-payment. And, you know what, the following year the same sequence of events happens again. If you or I would do this, or even be sixty-days late on our rent, we'd are thrown out onto the street.

Our lives are controlled by what is called a FICO score. This is a score that is based on what we owe compared to our borrowing power and the payment history of existing accounts. Without a good FICO score it becomes difficult to purchase insurance, an automobile, a home, credit card or even open a bank account.