Ultimate Credit Repair Guide

The Ultimate Credit Repair Guide

Written by William Lingle

www.CleverCreditRepair.com

P ag e 1


ALL RIGHTS RESERVED. No part of this book may be reproduced or transmitted for resale or use by any party other than the individual purchaser who is the sole authorized user of this information. Purchaser is authorized to use any of the information in this publication for his or her own use only. All other reproduction or transmission, in any form or by any means, electronic or mechanical, including photocopying, recording or by any informational storage or retrieval system, is prohibited without express written permission from the publisher. LEGAL NOTICES: While all attempts have been made to provide effective, verifiable information in this Book, neither t he Author nor Publisher assumes any responsibility for errors, inaccuracies, or omissions. Any slights of people or organizations are unintentional. If advice concerning business matters is needed, the services of a qualified professional should be sought. This Book is not a source of business or legal information, and it should not be regarded as such. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering a business or legal service. If expert business or legal assistance is required, the services of a competent professional person should be sought. As with any businessor legal or legal advice, the reader is strongly encouraged to seek professional business counsel before taking action. RESULTS DISCLAIMER: The use of our information, products and services should be based on your own due diligence and you agree that our company is not liable for any success or failure of your results that is directly or indirectly related to the purchase and use of our information, products and services.

Published by: William Lingle PRINTED IN THE UNITED STATES OF AMERICA - DISTRIBUTED WORLDWIDE Copyright ©2008 by www.CleverCreditRepair.com All Worldwide Rights Reserved.


P ag e 2


Forward The intention of this guide is to give you, the reader, the tools and techniques needed to effectively repair your own credit. It gives me much pleasure knowing that many people will be successful in repairing their own credit. At the time of this writing, the year 2008, the economy in the U.S. is less than ideal, and foreclosures are on the rise. Approximately 80,000,000 (yes that's 80 million) people in the U.S. suffer from poor credit. I believe in the coming years that number will rise dramatically. I urge you to pass this guide along to your friends, family and co-workers. I hope the information in the pages of this guide are informative and instructive, but mostly I hope it helps you to establish great credit and keep that credit for many years to come. And I want to thank my wife and kids for putting up with me while I did the research and time making this e-book. William Lingle


P ag e 3


Table of Content Section 1 - I ntroduction

How did I get here?............................................................................7 Where do I start?..................................................................................8 Myth 1 - Checking your own credit will harm your credit............8 Soft Inquiries vs. Hard Inquiries............................................8 Myth 2 - Credit data is the same between all bureaus................9 bureaus................9 Section 2 - The Credit Report

Single Bureau report vs. 3 Bureau report...............................................11 Reading your report the right way.........................................................11 The four sections of your credit report...................................................12 The MyFico 3 bureau credit report, the only one for you.........................12 Section 3 - Your Credit Score

Why the FICO score is all that matters...................................................14 Why your score could be costing you a fortune......................................14 How your score is calculated.................................................................15 What is a good score?..........................................................................15 Section 4 - Building Your Credit

On-time Payments are crucial...............................................................17 Revolving Credit vs. Installment Credit..................................................17 Debt to Credit Ratio.............................................................................18 Keep just the right balance of loan types...............................................18 Using Secure Credit Cards....................................................................19 Section 5 - Repairing Y our Credit

The Credit Secrets Bible.......................................................................22 Disputes and the Fair Credit Reporting Act.............................................23 Pay For Deletes....................................................................................23 Credit Repair Services – Lexington Law Law Firm..........................................25 Firm...................... ....................25


P ag e 4


Section 6 - Identity Theft

Credit Monitoring is the key..................................................................27 10 steps not to be a victim...................................................................28 What to do if you are a victim...............................................................30 Stop Credit Card offers forever..............................................................32 Identity Theft Services.........................................................................34 Lifelock Identity Theft Service...............................................................34 Section 7 - Debt Consolidation Services

The pros and cons of debt consolidation................................................36 In Summary……………………………………………………………………………………..38


P ag e 5


SECTION 1 - Introduction


P ag e 6


How did I get here? here?

If you are reading this, than most likely your credit is less than desirable. Perhaps you are in the process of buying a house, or refinancing an existing house. Possibly you want to buy a car or just get a credit card. Whatever it is that got you here, most likely means you are trying to repair your credit. This guide is intended to help you on your quest to repair your credit. The truth is that many of us today don't take the time to learn how to manage our money properly or take advantage of all the tax benefits available to us. More and more of us are getting deeper in debt each month while we borrow from credit cards just to make ends meet. It is usually too late when you realize r ealize your credit is critically damaged. Your credit is most often the last thing on your mind when times are tough. But in reality it should be the first thing on your mind. In fact keeping your credit in check at all times, could actually help you each month. I'll show you that repairing your credit shouldn't be difficult and in fact you should see results in as little as 30 to 90 days. Whether you determine to take matters into your own hands, or hire a credit cr edit repair service is up to you. It is really a decision based on how much time you can spend on it yourself versus how much you can afford to pay someone else. We will discover the pros and cons of each. In the end, once you are able to achieve stellar credit, it comes down to how to keep it. Many of the steps you take to fix your credit will help you keep your credit stellar. I hope these steps will become second nature to you. The truth is that "credit repair" is really something that I hope will become a lifestyle change for you. Maintaining stellar credit will benefit you in so many ways it could fill another book entirely. So let's get started.


P ag e 7


Where do I start? start?

The very first thing I am going to recommend is to sign up for f or the Clever Credit Repair Newsletter Newsletter.. Each month you will receive tips and links to discounts on products and services geared to help you repair and maintain your credit. Look for more "in depth" articles on credit repair, identity theft and debt consolidation on the Clever Credit Repair website if you want to really delve into learning about credit repair. Credit Repair is a two part operation - removing negative items and building new credit. However, before you can begin, you will need to get copies of your credit report and credit score. It's at this point I need to let you know that there is no one method that can help everyone. Unfortunately everybody's credit report is different and will require a different "game plan" to repair. Luckily most of the techniques I will teach you in this guide can be applied to everybody. So don't discourage, credit repair won't be difficult. Before we roll up our sleeves and jump right in lets dispel a few myths of credit repair.

Myth #1 - Checking your ow n credit w ill hurt your credit.

Let's dispel this myth now. Checking your own credit will have no impact on your credit. But if someone like a lender checks your credit, this can have an impact on your credit score. So why is this?

Soft Inquiries vs. Hard I nquiries

An inquiry on your credit is often called a credit check. All credit checks appear as inquiries on your credit report. Soft inquiries do not impact your credit score. A soft inquiry is when a consumer checks his or her own credit. Other forms of soft inquiries can come from fr om employment checks and landlord checks. However, when a lender checks your credit, this is a "hard inquiry" and can have as much as a 5 point impact on your credit score. When you are applying for credit, lenders will run a credit check to determine if you are worthy to extend credit to.


P ag e 8


If you are shopping for a home loan or auto loan, any grouping of hard inquiries on your credit made within a 45 day period will count as one inquiry. This allows you to shop for the best rate and not feel the affects of multiple hard inquiries. All inquiries will remain on your credit report for up to 2 years but after af ter 1 year will have little effect on your credit report. r eport.

Myth #2 - Credit Credit data is the same betw een all bureaus

There are three major credit bureaus and each keeps a credit profile on you. You might be surprised that your credit report is not the same at each bureau. Therefore you will want a copy of your credit report from each bureau so you will know exactly what needs fixed and what doesn’t. And with each bureau comes its own credit score. Once you establish credit, whether a credit card, a home loan, or a car loan, each lender will begin reporting back to the credit bureaus. But there is no written rule that they have to report to the bureaus. In fact they may report to one, two or any combination of the three. Because lenders report to different bureaus, your scores and reports are reflective of that. This means each bureau will possibly be maintaining a slightly different profile on you than the other bureaus. Because that profile is different, it will result in a different credit score from fr om the other bureaus as well. As we progress towards developing your strategy of credit repair, r epair, you will need to have copies of your credit report from f rom each of three bureaus. When a lender pulls your credit report in an effort to extend you credit, you don't know which bureau (or combination of) they may may choose to check on on your existing credit history. history. That is why you need to be aware of your credit score at all the bureaus, not just one. So you can see why it's so important to have copies of your credit report and scores from all three credit bureaus. We will discuss later in this guide strategies for pulling your credit reports from all three credit bureaus.


P ag e 9


SECTION 2 - The Credit Report


P a g e 10


Single Bureau Credit Report vs. 3 Bureau Credit Report

Since we will be in the market for f or getting our credit report from all 3 credit bureaus, you will be happy to know it won't cost you a fortune. In fact many companies offer a combined 3 bureau credit report. This will make it easy to get all three copies of your credit report, but also will make it easy to compare the three reports for any inconsistencies. The Four Sections of You r Credit Credit Report

On your credit report at each agency will be four main sections: The first section highlights personal information about you such as the spelling of your name, aliases you go by, current and past addresses, your social security number and any other pertinent information. Section two will typically be the largest section and will contain all of your past and current credit line information. Credit lines are your home, auto and other loans in your name as well as revolving credit lines like credit cards. This section will show the lenders name, account number, credit limit, payment history, late payments and also the status of the loan (closed, open, inactive, paid or sent to collections). The next section is Public Records. This section has foreclosures, bankruptcies, tax liens and other judgments against you. Depending on when these judgments took place, these items will most likely have the most impact on your credit score. The last section deals with Inquiries. Each time a lender views your profile to approve you for credit it is noted in the Inquiries section. A few points may be taken from your score each time this happens. If I f you view your own credit, you will not be assessed any points from your score.


P a g e 11


In itial Strategies Strategies for Reading Y our Credit Report

When you receive your 3 bureau report, the first f irst thing to look for is erroneous information. Don’t be surprised to see misinformation, wrong information, credit lines that don't belong to you, any number of things that could be wrong, and probably will be. Luckily these things are the easiest to dispute. Think of these as the "low hanging fruit" of credit repair. Make sure to scan thoroughly each section of your report, right down to your name and social security number and any trade lines that don't belong to you. Checking the "personal information" section and "trade line" section of your report may lead to finding possibilities of Identy Theft, discussed in detail later in this guide. T h e MyFICO Three Credit Bureau

There is one product out there that gives you both a 3 bureau credit report and your FICO score from all three credit bureaus in one product. Although we haven't discussed the importance of the FICO score yet, just know that this is the score that lenders use when they decide to give you credit. A company called MyFICO (part of the Fair Isaac Corporation that developed the FICO score) offers a product called FICO Credit Complete. Complete. This is the product I recommend r ecommend getting as it gives you everything you need to get started with repairing your credit. The FICO Credit Complete package includes: One FICO score from each national credit bureau TransUnion, Experian, and Equifax Three credit reports from each national credit bureau TransUnion, Experian, and Equifax Fico Score Tools These tools can help simulate changes to your score when making additional payments on a loan, missing loan payments, getting a new loan, cancelling a credit card and many other factors.


P a g e 12


SECTION 3 - The Credit Score


P a g e 13


Why the FICO score is all that matters

The score used most by lenders to grade your credit, is the FICO score. For this reason then, the FICO score is the only one that matters. Improving this score then becomes the ultimate goal in credit repair. But the FICO score is complex and therefore we will have to take into consideration many things to begin making your score start climbing higher. The higher the score the better. Why your score could be costing you a fortune

Even though the difference between a score of 719 and 720 is only 1 point, that one point could be costing you thousands of dollars in interest payments over the course of a loan. 720 is what most lenders consider "excellent" credit. And if you have a score of 719, you won't be getting the same interest rate. This is why it's so important to know exactly what your score is and from all three credit bureaus. How your score is calculated?

There are many types of credit cr edit scoring systems, but the one used most often by lenders is undoubtedly the FICO Score. The FICO score software was developed by the Fair Isaac Corporation for each one of the 3 big credit reporting bureaus. Because not every lender reports about your loans and credit card information to all 3 of the reporting bureaus, your score may differ from each one. That's not to say that each one calculates the score differently, only that each credit bureau may not have the same data about you. That's important to know, and one of the keys to improving your credit is getting a copy of your credit report from each one of the 3 major credit reporting bureaus - Equifax, Trans Union and Experian.


P a g e 14


How are the scores calculated? (source from FICO.org) FICO.org)

35% of your score is based on Payment History. 30% of your score is based on Amounts you owe. 15% of your score is based on Credit History 10% of your score is based on New Credit (new accounts and recent requests) 10% of your score is based on Credit in Use (types of credit - mortgages, auto loans, credit cards) What is a good score?

Below 620 Poor Credit (in other words - hurting!) 620-660 You will be extended Sub-Prime financing. Still, ouch! 660-720 This is Average, but you will still be assessed higher rates. 720-750 This is Excellent. We all aspire to this. 750 + Champaign pours from the heavens. This would be a perfect score. These numbers are not set in stone, but lenders typically go with these numbers. In all honesty, we are shooting for 720. This "typically" is what lenders gauge excellent credit on and will give you the best interest rates r ates on loans. Don't forget that the only product available with all 3 FICO scores from each of the national credit bureaus is the MyFICO Credit Complete package from MyFICO.


P a g e 15


SECTION 4 - Building Your Credit


P a g e 16


On-time Payments are crucial

It's almost difficult for me to state what seems so obvious, but making on-time payments on your credit cards and home/auto loans is probably the most important credit building activity you can perform. This should include the obvious payments for mortgages, car loans, credit cards, but also the less obvious payments like gym memberships and movie rentals. Unless you are sure that someone is not reporting on you, it is best to pay on time. If there is one thing that will ruin your credit history overnight, it's making payments late. One late payment can have adverse affects on your credit report and resulting score. From this point on, make absolutely certain that all your revolving and installment type debt payments get made on time. Once you make the effort to repair your credit and achieve that dream score, you don't want to mess it up at any cost. Revolving Credit vs. Installment Credit

Revolving credit is credit extended to you in the form of a major credit card or department store credit card. You will be given a maximum amount that you can charge on this card and then be assessed a minimum payment based on your current balance due. The interest rate is determined ahead of time, typically when you initially apply for the card. Revolving credit is a great starting point for those trying to establish a credit history for the first time. Your revolving credit will be displayed on your credit report. It is important to make sure you keep your payments up to date and on time, as late payments will negatively affect your credit score. Installment credit is a fixed term amount and fixed term payments. Examples of an installment account would be a student loan, an auto loan or a home loan. Like revolving credit, your payment history will be reflected on your credit report. That includes on time payments and late payments. Defaulted loans on car loans and student loans, or foreclosures will remain on your credit report for 7 to 10 years. To maintain a great credit score s core make sure to keep payments on all loans on time.


P a g e 17


Debt to Credit Ratio

Are you the kind of person who pays off all their credit card bills at the end of each month? You might be surprised to find out this actually has an adverse affect on your credit. Because lenders make money by charging interest, your credit score is derived by your ability to maintain a monthly balance and make payments over an extended time period. This actually demonstrates to lenders your true credit worthiness and will help raise your score if done correctly. Lenders want to see that you can consistently over time maintain a balance and make monthly payments. This is what is considered good credit history and will improve your score over time. This only applies to revolving r evolving accounts like credit cards. If you have $10,000 in credit and are maintaining a $2500 balance, this would be a 25% ratio. Anything over 50% is considered too high and you will be considered a risk to the lender. In fact a 30-35% balance would be ideal to maintain to help improve your score. Am I advocating that you keep 30-35% balance on your credit cards? Yes and no. A good strategy might be, if you are going to be in the market for an auto loan or mortgage loan (installment accounts), then you may want to position yourself with the right debt to credit ratio perhaps 3 to 4 months before applying for a new loan. This should be sufficient time to raise your credit score. Keep just the right balance of loan types

Lenders will want to see a variety of loan types especially when applying for a home loan. Having 2 to 3 credit cards in combination with an auto loan and on time payments with your gym membership will demonstrate you are a good consumer who pays his loans on time. You in fact f act become the ideal candidate to extend credit to since you have demonstrated you can juggle multiple lines of credit and make payments to each. This is yet another way to build credit and improve your credit score.


P a g e 18


Using Secure Credit Cards to build Credit

For those of you familiar with golfing, you know what I mean. You step up the first hole, the flag is 240 yards out, a small breeze from the southeast, your backswing is perfect and....you chunk it 20 feet to the right r ight and nail the golf cart. Time for a mulligan. Or a "do over" as the rest of us might call it. Improving your credit is a really a systematic process of removing the bad items that drive your score lower, while improving or adding to those things that help drive your score up. One of the quickest ways to drive your score sc ore up is to maintain a small balance on your credit card and make monthly payments (on time) over a 6 month to one year period. If nothing else, this can have a significant affect on helping your credit score. However, for some folks, they can't get approved for a regular credit card. And since this can be such a big part of your strategy to improve your credit, there is an alternative - the Secured Credit Card. For those of you with bad credit, or perhaps new to credit, the secured credit cr edit card is a great place to start star t building credit. A secured credit card is available to almost anyone (unless your credit is severely bad). It works by making a deposit into a savings account or CD. This money is unavailable to you during the time you have the card. It can earn interest and that interest will go to you. Always check the fine print to be sure. This deposit is used by the lender much like a security deposit on an apartment. If you fail to make payments, the lender can draw from this to cover their losses. Don't let this happen as not making your payments will have an adverse effect on your credit just like any credit card. Remember, we are trying to build credit here. Typically your credit limit will be 100% of your deposited funds. Since there is little risk to the lender for this type of card you should be able to shop around for a good interest rate.


P a g e 19


Application fees should be between $50 and $100 as well as annual fees. This seems like a lot to give up just for a credit card, but your alternative would be to get an unsecured card with an extremely high interest rate. In the end it may be more advantageous to get the secured card. Of course the most important aspect of getting a secured card is to establish credit and begin driving your credit score higher. In that vain, you want to make sure the card you apply for reports to all the major credit bureaus. This is the whole reason to get a secured credit card so do your homework in choosing the rights card. Every month as you make your monthly payments on time, they get reported to the credit bureaus. As these new payments are the most recent, they will take precedence over past due amounts and in time this will begin driving your score higher! I personally recommend getting the Horizon Gold Secure Card. Card.


P a g e 20


SECTION 5 - Building Your Credit


P a g e 21


The Credit Secrets Bible

It’s at this time I want to introduce you to a product called the Credit Secrets Bible. Bible. Essentially when it comes to matters of credit repair, r epair, you can do it yourself, or hire a credit repair service. It’s really a matter of personal choice choice which avenue you choose to repair and maintain your your credit. Each method has its pros pros and cons. cons. The do it yourself (diy) approach will take more of your personal time, but in the long run will cost you less. less. Picking the right credit repair service will get the the job done with less of your time, but will cost more out out of pocket in the long run. I’m a big advocate of the do it yourself approach because I see credit repair as something I’ll most likely be doing doing the rest of my life. Think of it as a lifestyle lifestyle change. In that vain, it makes sense to me to educate myself the best that I can with credit repair knowledge so I can do the best job. I’m not knocking credit credit repair services, but I just feel when I do something for myself, I tend to get the job done better than hiring out. The Credit Secrets Bible is the “holy grail” of credit repair knowledge. Packed with the latest forms, and credit repair techniques, this product will make it seem easy as they hold your your hand through the many many intricate steps of credit repair. By the time you are finished reading this you will be overwhelmed with the knowledge you have have gained. I truly felt empowered when I finished reading it (actually after about the 3 rd time because there is so much information to be gained). If you haven’t signed up for the Clever Credit Repair Newsletter, Newsletter, I urge you to do that now. Truly the combination of my newsletter and the Credit Secrets Bible will be all the ammunition you will need to keep your credit “in check” for a long time to come.


P a g e 22


Disputes and the Fair Credit Reporting Act

Removing negative items from your credit report is a more complicated subject. Enter the Fair Credit Reporting Reporting Act to your rescue. This law was passed to help help the consumers. The FCRA says that the consumer consumer can dispute negative negative items found on their credit card deemed to be inaccurate. inaccurate. Presented in the correct fashion to the credit bureau will prompt an investigation from the credit bureau to look into this inaccuracy. The credit bureau then has 30 days to investigate the matter and if it can’t be resolved than the negative item will be removed from your report. This is one of many techniques used to remove items from your credit report, so use it correctly. Details of this technique technique can be found in the the Credit Secrets Bible. Bible. P ay For Deletes

Everyday I’m in this business I hear people giving bad advice. The one piece of bad advice that I hear the most is that you must wait 7 years to have negative credit removed from your credit report. It really depends on the trade line in question. Some of the ones you can’t change: Chapter 13 Bankruptcies will remain on your credit report 7 years. Chapter 7, 11 or 12 Bankruptcies will remain on your credit report for 10 years. Judgments - 7 years Paid Tax Liens - 7 years Unpaid Tax Liens - 15 years Foreclosures - 7 years (in rare cases, this could be removed) r emoved) If you have an unpaid collection on your credit report, r eport, then there are several courses of action that you can take try and have the item removed from your credit file. If your debt has gone to a collection agency than there may be some hope to have this negative item removed from your credit report. Hopefully you have not already started making payments or have had any verbal or written communication with the collection agency, or you may not be able to use this technique.


P a g e 23


You can try and negotiate with the collection agency verbally or by written letter but you must ABSOLUTELY get there response in writing. I suggest that all communication be in writing so you don’t accidentally say the wrong thing. I will put some links to some “Pay for Delete” sample s ample letters at the end of this post. First, always try and negotiate to pay pennies on the dollar, and not pay in full. Let me pause here and say that I would normally feel guilty not paying my debt in full, but understand that the collection agency paid pennies on the dollar to get this collection. Why should they make a profit? In your negotiation with the collection agency, ask them for a “Pay for Delete”. Essentially in negotiating to pay off this debt (hopefully for less than the original amount), you are asking them to remove the trade line from f rom your credit report completely. Even if you have to pay the full amount, this will really help your credit score. The next best thing will be to get the collection marked as “Paid Satisfied”. This won’t nearly help your credit score as much as getting it completely removed but it’s better than “unpaid”. Some collection agencies just won’t bargain with you for “pay for delete”, so this is next ideal situation. Remember, you need to get something for paying the debt. If the debt has been around for many years you might want to check the Statute of Limitations. This is the amount of time that passes by when this debt can’t be collected upon (so no reason to pay it). Don’t confuse this with how long it can be reported on your credit report.

This is yet another of the many techniques used to remove items from your credit report. Details of this this technique can also be found in the Credit Secrets Bible. Bible.


P a g e 24


Credit Repair Services Services – The Lexington Law Firm

“Lexington Law is the oldest and largest attorney provider of affordable credit repair services.”, at least that’s that’s what there website says. Who am I to dispute dispute that? I have heard only good things about them, and from what I can see on their website they have helped over ½ million clients repair their credit since they started in 1991. Perhaps you don’t have the time to do it yourself, or you just don’t care to learn how, a credit repair service is there to do the footwork footwork for you. After an initial consultation, these folks go into action quick to start the credit repair process on your behalf. Since I’ve not tried it myself myself I don’t have much knowledge knowledge to convey about the subject. I can say that if you’re thinking of going this route I’ve only heard good things about The Lexington Law Firm. Firm.


P a g e 25


SECTION 6 – Identity Theft and Maintaining your Credit


P a g e 26


Credit Monitoring is the Key!

A credit monitoring service allows you to access your credit report r eport at one or all 3 major credit bureaus. The typical service will also allow you to s ee your credit score initially and then at specified time periods. You can setup alerts to notify you of major changes to your credit file. This could mean the possibility of Identity Theft. Many credit monitoring services even offer Identity Theft insurance just for signing up that helps to reimburse you monetarily for damages in case you're a victim. If you are in the process of repairing your credit you are going to need a copy of your credit report from each major credit bureau. When creditors report information to the credit bureaus about you they may or may not report r eport to all 3 credit bureaus. This means that each credit bureau will have different credit history information about you. It is possible to have information in your credit r eport that doesn't even belong to you. This can happen quite often to people that have common name spellings, like John Smith or Mary Jones. Even if you have a unique name, you need to scrutinize each detail on your credit reports from each credit bureau. You will be surprised how many mistakes you can find. You can order your credit report from each credit bureau, but an easier solution is to order a 3 bureau credit report from just one service. The format of each report will be identical making it easier to spot the differences between each credit report. As you begin the credit repair process, you will want to monitor your FICO score as it pertains to each credit bureau. The FICO score is the score most commonly used by lenders in approving credit applications. Each of the 3 major credit bureaus has its own FICO score based on the way it maintains credit information about consumers. For this reason you will want to know what your FICO score is at all 3 credit bureaus. As an example, if you apply for credit from f rom ABC Credit Card knowing your FICO score at Experian is 725, but they check your FICO score at Trans Union which is 680, you may not get a favorable interest rate. The only service that provides FICO scores and credit reports from all 3 major credit bureaus is MyFICO MyFICO,, the consumer division of the company that created the FICO score. By monitoring your FICO score you will be able to determine if your efforts of credit repair are making any kind of impact.


P a g e 27


When you have achieved good credit it is also a good idea to monitor your FICO scores and credit reports. You don't want all that effort of establishing good credit to be wasted. And it's much easier to keep good credit than to have to repair it all over again. By setting up alert monitors you can be notified of major changes in your credit file via email. This can be a good indication someone is trying to steal your identity or that something else major has happened that requires your attention. It's one of the great features of a credit monitoring service so take the time to set them up. Most credit monitoring services offer Identity Theft insurance that can pay you up to $25,000 in damages incurred my stolen identity. The 10 Steps to Avoid Iden tity Theft

I remember logging on to my bank account one day to see a negative $800 balance. I immediately called the bank and they told me I wrote too many checks. I replied back "I don't even use this checking account, it's for a rental property!”. Identity Theft victim number 2,375,394,293 Someone had stolen the checkbook from my truck a couple of weeks earlier. I hadn't even noticed noticed since I didn't really use use the account. They wrote several bad checks. Luckily for me the bank ruled in my favor, but but I still needed to fax several several documents to about 20 different stores to get them to stop harassing me. That's one of hundreds or thousands of ways people can make money from you and wreck your credit history, or worse. It's called Identity Theft and it's growing at a troublesome rate. Here are some steps you can take to try and avoid this happening to you: 1. Shred Everything

If you think it has even a hint of information that someone might use to steal your identity, identity, don't hesitate to shred it. Shredders are common common place items now in homes and office. office. You can buy a shredder shredder for less than $20 at any office supply store. It's worth the price. I shred everything including the envelope they come in. Especially any kind of statements, bills, receipts and especially credit card offers.


P a g e 28


2. Remove your name from the lists

Remove your name from the lists offered up by the credit bureaus to lenders with your credit information contained in it. I have given instructions later in this guide with instructions on how to do this. 3. Don't carry your credit cards

Don't carry your credit cards on you unless absolutely necessary. And by all means, don't ever carry any PIN numbers in your wallet or purse. Credit cards should be be left at home if at all possible. possible. And perhaps locked in a safe. 4. Monitor your Credit Report

Credit monitoring services allow you to monitor your credit scores and your credit reports from from all the major credit credit bureaus. You can even be notified notified by phone or email if something dramatic changes on your credit that could be construed as Identity Theft. Check out MyFico for great credit monitoring solutions. 5. Guard your Social Security Number

Absolutely do not carry around your Social Security Number card with you at any time. Be very careful who you give out your number to, and ask if it's really necessary if they they have it. Just use your best judgment before before giving it out too easily. 6. Photocopy all the contents of your wallet

This includes credit cards, drivers licenses, etc. Make sure to get both sides, expiration dates, account numbers, customer support phone numbers. This way, in the event your wallet is stolen, you can very quickly cancel or suspend these accounts or notify the proper officials. 7. Cancel unused Credit Cards

If you have credit cards that you aren't using, and that you haven't established a credit history with, you should cancel these. Some folks save these for a rainy day, but the risk of these being stolen and used before you are aware of it is too risky. Be careful not to cancel cards that have a credit history because it could have adverse affects on your credit.


P a g e 29


8. Be careful giving out Credit Card info on the phone

Know who you are dealing with on the phone. Did you call them? Have you done business with them before? Did they call you claiming to be a business you recognize? Are you sure? Just be careful before giving out info over the phone. 9. Make sure to use SSL on the Ineternet

Before giving out Credit Card info or any personal information over the web, be sure you are using SSL. You will know this when the websites URL begins with HTTPS:// as opposed to HTTP://. If you are not sure, call the technical support department to be sure the transaction will be safe. 10. If you have been victimized!

Place a fraud alert on your credit reports, and review your credit reports. Fraud alerts can help prevent an identity thief from opening any more accounts in your name. Contact the toll-free fraud number of any of the three consumer reporting companies below to place a fraud alert on your credit report. You only need to contact one of the three companies to place an alert. The company you call is i s required to contact the other two, which will place an alert on their versions of your report, too. Equifax: 1-800-525-6285; www.equifax.com; P.O. Box 740241, Atlanta, GA 30374-0241 Experian: 1-888-EXPERIAN (397-3742); www.experian.com; P.O. Box 9532, Allen, TX 75013 TransUnion: 1-800-680-7289; www.transunion.com; Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92834-6790 Once you place the fraud alert in your file, you're entitled to order free copies of your credit reports, and, if you ask, only the last four digits of your Social Security number will appear on your credit reports. Once you get your credit reports, review them carefully. Look for inquiries from companies you haven't contacted, accounts you didn't open, and debts on your accounts that you can't explain. Check that information, like your Social Security number, address(es), name or initials, and employers are correct.


P a g e 30


If you find fraudulent or inaccurate information, get it removed. Close the accounts that you know, or believe, have been tampered with or opened fraudulently. Call and speak with someone in the security or fraud department of each company. Follow up in writing, and include copies (NOT originals) of supporting documents. It's important to notify credit card companies and banks in writing. Send your letters by certified mail, return receipt requested, so you can document what the company received and when. Keep a file of your correspondence correspondence and enclosures. enclosures. When you open new accounts, use new Personal Identification Numbers (PINs) and passwords. Avoid using easily available information like your mother's maiden name, your birth date, the last four digits of your Social Security number or your phone number, or a series of consecutive numbers. If the identity thief has made charges or debits on your accounts, or on fraudulently opened accounts, accounts, ask the company for the forms to dispute those transactions: • For charges and debits on existing accounts, ask the representative to send you the company's fraud fraud dispute forms. If the company doesn't have have special forms, use the sample letter to dispute the fraudulent charges or debits. In either case, write to the company at the address given for "billing inquiries," NOT the address for sending your payments. Once you have resolved your identity theft dispute with the company, ask for a letter stating that the company has closed the disputed accounts and has discharged the fraudulent debts. This letter is your best proof if errors relating to this account reappear on your credit report or you are contacted again about the fraudulent debt.


P a g e 31


File a report with your local police or the police in the community where the identity theft took place. Then, get a copy of the police report report or at the very least, the number of the report. It can help you deal with creditors who need proof of the crime. If the police are reluctant to take your report, ask to file a "Miscellaneous Incidents" report, or try another jurisdiction, like your state police. You also can check with your state Attorney General's office to find out if state law requires the police to take reports for identity theft. Check the Blue Pages of your telephone directory for the phone number or check www.naag.org for a list of state Attorneys General. Stop Credit Card Offers Forever!

If you are like me, when I bring in the mail everyday, invariably there are a few credit card offers. I used to just toss them out. Now, I've made sure sure that I don't get them anymore, a nymore, and I'll show you too. To someone trying to steal your identity it's like gold. Simply fill it out, change the address and they are on their way to a new credit card, IN YOUR NAME! Don't let it happen to you. Even if you think you won't be the candidate for Identity Theft, think of the incredible waste of paper being generated every day by these unused offers for credit. It must amount to tons of paper being thrown away everyday. We owe it to globe to stop this madness, even just one person at a time. The Fair Credit Reporting Act gives the credit bureaus permission to sell your credit history information to credit lending companies. By default they can sell your information if they so choose. An amendment to this act in 1990 allows for consumers to choose NOT to receive these offers. I feel it should be the other way around.... Probably the reason I currently have 4 credit cards is due to temptation. Offers rolling in with the ability to transfer balances from other cards, lower interest rates, etc. By not reading the fine print, I've I 've been burned on this a few times. If you feel you are susceptible to this, then another great reason to stop offers come in is to stop the temptation of acting upon them.


P a g e 32


OK! ENOUGH! How do I do it? First there is a service run by the four main credit bureaus that will get you off their lists. This step alone should stop all "Pre-Screened" offers offers from rolling into your mailbox. This service can be contacted via two different methods: Website: http://www.optoutprescreen.com http://www.optoutprescreen.com Phone: 1-888-5-OPTOUT 1-888-5-OPTOUT Either method should exact the required results. Theoretically that should should work with with all your pre-screened pre-screened offers. But you will still most likely receive offers and "convenience" checks from any banks or credit cards you currently are associated with. On the back of each of your credit cards will be a customer service number. Call each number and ask to be removed from any additional card offers, convenience checks, phone calls, etc. I found that when I did this, the customer service reps were very helpful in explaining all the services and removing from each one. Call your bank(s) customer service and ask to be removed from all credit card offers, convenience checks, etc. also. My banks, too, were very helpful in this matter. This all seems very tedious and it is. But you will be surprised how that big handful of mail everyday, becomes a small handful. You will be helping the environment, saving yourself from temptation, and reducing your chances of being a victim of identity theft. It's worth the effort. Good Luck and start dialing!


P a g e 33


Id entity Theft Services Services – Lifelock I dentity Theft Service Service

There is a service out there there that deals explicitly with with Identity Theft. I remember seeing the TV commercial for the first time where the owner proudly presents his social security number number on the side of a bus. He didn’t seem worried at all that the world knows his social security number. I remember thinking this can’t be right. Well, after some investigating on Google, I found out this really is his SSN number. The name of the the company is Lifelock Identity Services. Again, some of these ideas, you can do yourself, like monitoring the 3 credit bureaus for changes, but for the sake of time a service like this can do these things for you. For I believe $10 a month, month, it is cheap insurance. Plus, they have a $1 million dollar guarantee. They take care of monitoring monitoring your credit, setting fraud alerts, etc. They say it well on their website, “sure you can change your own oil, but most of have specialists do it for us. It’s the same with with Identity Theft….”. Theft….”. I suggest at least checking out Lifelock Identity. Identity.


P a g e 34


SECTION 7 – Debt Consolidation Services


P a g e 35


Don’t fall for it!

I wish I could tell you there was a magical way to make your debts go go away. The truth is that there really is no way to take all your debts, consolidate them, negotiate the whole enchilada down to a few hundred bucks and pay it all off in $10 payments in the next 6 months. The truth is most of these services will consolidate your payment into on payment that very often is a higher interest rate average than what your paying now, plus stick in a nice fee every month to themselves. themselves. The reason the interest rate is higher higher is because you are a credit risk to them. If your credit was great you would would get a good interest rate. Most likely however however you are in debt because because you are behind in your payments, and therefore most likely your your credit rating is no good. good. I haven’t met too many people with major debt and great credit. Do it yourself debt consolidation is an optio n

Like everything I advocate in this guide, doing things yourself will yield the best results. But consolidating your your own debt is going going to require discipline on on your part. It won’t be easy because most most likely it’s lack of discipline discipline that got you into into your debts to begin with. with. I’m hoping to arm you with enough ideas to tricks to make this easy for you. Ok, let’s get going with this. Honestly your best bet is to negotiate directly with your credit card companies to try and reduce your interest rates. If you have equity in your home, get an equity line of credit to pay off your credit cards. The interest rate will be much lower. The problem I see most people people get into is this. They will get an equity equity line of credit for $40k. $40k. Then pay off there $30k $30k in debt. Now they have credit cards with an instant $30k in available credit and still have $10k in the bank remainder from there equity line of credit. The smart thing thing to do here would be to pay back $10k on their equity line of credit and cut there credit card into pieces. Most people however however will begin racking up more debt on their their credit cards. Use the $10k as a down payment on an expensive sports car and be right back where they started plus have an additional $40k equity line of credit to manage.


P a g e 36


Do it yourself debt consolidation is possible, but it is going to require r equire some serious discipline on your part. A few steps I personally have done. My suggestion is to first take take all your credit cards and freeze them, literally. Get out a zip lock bag for each credit card. Fill each bag with water and place exactly one credit card in each bag. Place in freezer. This will stop the temptation of using the cards because they won’t be in your wallet when you see something on sale when you happen to be walking through Nordstrom during one of there many half yearly sales. If in the case of an emergency, you do need a credit card, pull one out of the freezer and let it thaw. Do not use a microwave microwave oven to thaw out out your credit card or you will destroy it. it. By keeping each one one its own bag, you now won’t have all of your credit cards back in your wallet/purse again, just one. Hint: refreeze it to avoid any temptations. Since this guide isn’t about Debt Consolidation you can look for further tips and ideas on debt consolidation on the Clever Credit Repair website. website.


P a g e 37


In Summary Well, we have covered a lot of information. I really hope this helps you get started on the road to credit repair. Credit Repair is not really just fixing your credit, it’s really about keeping your credit in good standing standing at all times. As you move through life, this will literally save you tens of thousands of dollars in interest on home loans, refinances, car loans, school loans and credit card interest. Please check in with me at http://www.CleverCreditRepair.com http://www.CleverCreditRepair.com.. You will always find new articles and interesting reading on the topic of credit cr edit repair. I wish you the best life has to offer, William Lingle


P a g e 38

Ultimate Credit Repair Guide

Recommend Documents