Commonly Held Myths on Consumer Credit, Including the Hazards of Consumer Credit Counseling Service.

MYTH: Going to Consumer Credit Counseling is a good solution to having excessive debt payments.

TRUTH: Going to Consumer Credit Counseling can severely damage your credit. Many people do not know that the words "account managed by Consumer Credit Counseling" may appear on their credit report, and that when the majority of lenders see those words, they interpret them to say "self-made bankruptcy in progress." A poll of both traditional lenders (such as banks and national mortgage companies), and non-traditional lenders (such as sub-prime lenders, non-conforming mortgage companies, and finance companies) yielded a fairly unanimous opinion: being in a debt counselling program or consumer credit counseling program was just as damaging to a person's credit as filing a bankruptcy. Some lenders will not grant a loan to a person until they are out of the "debt program."

The problem lies partly in the fact that the creditor does not receive a full payment each month; therefore, you are reported as being "late." Having a whole string of lates severely lowers your credit score, so that you cannot get approved to buy a house unless you make a very large down payment and take a higher interest rate, to boot.

What should you do if your debt payments are too high? Could you be a "financial time bomb"? (If so, you need to take action fast!

How can you stop collectors from hassling you? Even more important, do you know about the legal loophole that forces collectors to cease and desist from pursuing collection? Read about it here: Zap Your Debt and Discover Wealth.

To read about these as well as other credit card secrets and tips, get "How to Buy a House If You Have Bad Credit."

MYTH: Letting a car go back to the auto dealership is acceptable as long as it is done on a voluntary basis.

TRUTH: Voluntary repossession is just as derogatory and damaging to a credit report as an involuntary repossession. Lenders are not concerned with whose idea the repossession was; they are concerned with the fact that a creditor had to take back merchandise rather than get paid as agreed.

However, you still have options. If you've still got the vehicle, there is one way to get rid of it without hurting your credit, even if you're upside down in what you owe. And if you already have a repo on record, then there are three legal loopholes you can use to get compensation. What's more, you should go one step further and have it deleted from your credit report as well, because doing so will significantly raise your score. For details, see Zap Your Debt and Discover Wealth.

MYTH: A tax lien will drop off your credit report after seven years.

TRUTH: Not necessarily. A tax lien may stay on your credit report for ten years or even longer. And even if it does fall off, the IRS will not forget it. The tax debt is connected to your social security number, so it follows you around like an ugly shadow. But there's good news, too. Congress has approved a little-known program that allows people to settle for pennies on the dollar. And if you're an "innocent spouse," you can get it waived altogether. All the details, including the forms you need to submit your claim are in Zap Your Debt and Discover Wealth.

MYTH: You should not shop around for a mortgage because too many inquiries on your credit report will lower your score, and may make it difficult to qualify for the best loan. This myth is so commonly believed that it was printed as fact recently in a well-known newspaper.

TRUTH: You are allowed an unlimited number of mortgage inquiries in a 14-day period without lowering your score or harming your credit in any way. The same goes for installment loan inquiries, such as automobile dealers. However, too many revolving account (credit card) inquiries in a short time period will lower your score. Learn the whole truth about credit scoring, how it works, and how you can improve your own score in "Unlock the Credit Score Secret! Get Your Highest Score Ever and Save Thousands of Dollars!"

MYTH: If you have late payments which were not your fault due to extenuating circumstances, a mortgage lender will overlook it.

TRUTH: If you have late payments for any reason or a bankruptcy, you need to know the inside scoop on how to handle it in the best possible way. The information is priceless, because it will save you tens of thousands of dollars and years of grief. Get what you need in "How to Buy a House If You Have Bad Credit."