Foreword xvii
Introduction 1
About This Book 2
Foolish Assumptions 3
Icons Used in This Book 4
Beyond the Book 4
Where to Go from Here 5
Part 1: Getting Started with Credit Repair 7
Chapter 1: Introducing Credit Repair, Credit Scores, and Your Life on Credit 9
Repairing Bad Credit 10
Settling debts 10
Resetting your goals 11
Rebuilding your credit by using it 11
Using a cosigner or becoming an authorized user 12
Finding sources of free help 12
Dealing with collectors 13
Weathering a Major Crisis 13
Mortgage meltdowns 13
Medical debt 15
Student loans 16
Car loans 16
Understanding Diversity in Credit 16
Filing Bankruptcy 16
Protecting Your Credit and Your Identity 17
Getting familiar with credit laws 17
Receiving free reports and filing disputes 18
Signing up for credit monitoring 18
Setting alarms, alerts, and freezes 19
Identifying identity theft 19
Maintaining Good Credit Throughout Life 20
Establishing credit for the first time 20
Making credit changes at life’s stages 21
Avoiding pitfalls 21
Managing Credit in Today’s Unforgiving Economy 22
Planning for success 22
Reviewing your credit report 23
Knowing your credit score 23
Considering credit a renewable resource 24
Chapter 2: Turning Your Credit Around 27
Understanding How Your Actions Impact Your Credit Score 28
Using a Cosigner to Raise Your Score 29
Turning Small Purchases into Big Credit 30
Maximizing Your Credit Score with Major Expenditures 33
Leveraging your mortgage 34
Financing your car 36
Paying back student loans 37
Understanding How Good Debt Builds Good Credit 38
Achieving goals with the help of credit 38
Sending a message to potential lenders 39
Giving nonlenders a sense of how you handle responsibility 39
Selecting the Best Tools for Building Your Credit 40
Spending your way to better credit with a spending plan 40
Tracking your progress: Paying attention to your credit report and score 41
Chapter 3: Cleaning Up Your Credit Reports 43
Understanding the True Value of Good Credit 44
Reviewing Your Reports for Problems 47
Using the Law to Get Your Credit Record Clean and Keep It That Way 50
Identifying and Disputing Inaccurate Information 53
Understanding the dispute process 53
Correcting all your credit reports 54
Contacting the creditor 59
Adding Positive Information to Your Credit Report 60
Asking your landlord to report your rent payments 60
Adding your utility and cellphone payments to your report 60
Opening new credit accounts 61
Adding a 100-word statement 61
Chapter 4: Getting the Best Help for Bad Credit for Free 63
Knowing Whether You Need Help 64
Gauging your need for outside assistance 64
Handling situations on your own 65
Identifying Help You Can Get for Free 67
Getting help with your mortgage 68
Considering credit counseling 69
Working with an attorney 74
Chapter 5: Coping with Debt Collection 77
Handling Those Collection Phone Calls 78
Knowing what collectors can do 78
Knowing what collectors can’t do 80
Deciding whether to answer the phone 81
Preparing to answer collection calls 81
Knowing what not to say 82
Taking Charge of the Collection Process 83
Asking for proof that the debt is yours 84
Knowing when debts fade away: Statutes of limitations 84
Negotiating a payback arrangement 86
Keeping your promise 87
Identifying Escalation Options That Help 89
Asking to speak to a manager 89
Approaching the creditor 90
Fighting harassment 91
Communicating with Customer Service Before Being Placed for Collection 92
Contacting your creditor promptly 93
Explaining your situation 94
Offering a solution 95
Covering all the bases 96
Keeping Collectors in Check 96
Calling in a credit counselor 96
Referring the matter to your lawyer 97
Freeing Up Money to Pay a Collector 97
Utilizing a spending plan 97
Cutting the fat from your monthly spending 98
Avoiding Collectors Altogether 98
Getting organized 99
Stopping the paycheck-to-paycheck cycle 100
Chapter 6: Working with Collectors, Lawyers, and the Courts to Manage Debt Obligations 101
Getting a Handle on Charge-Offs 102
So what is a charge-off? 102
Making sense of unpaid charge-offs 103
Making charge-off payments 104
Coming to a Debt Settlement Agreement 105
Considering a debt settlement offer 105
Hiring a debt settlement firm 106
Reaching expiration dates on debts 106
Finding Out about Judgments and What They Mean to You 107
Understanding Wage Garnishments 110
Dodging wage garnishments 110
Figuring out how much can be garnished 112
Stating Your Case in Court 112
Managing IRS Debts, Student Loans, and Unpaid Child Support 114
Handling IRS debts 114
Educating yourself about student loans 115
Putting your kids first: Child support 117
Part 2: Reducing Credit Damage from Major Setbacks 119
Chapter 7: Reducing Credit Damage in a Crisis 121
Assessing the Damage from a Mortgage Meltdown 122
Understanding How Mortgages Differ from Other Loans 124
Spotting a foreclosure on the horizon 124
Counting to 90 125
Knowing Where to Turn for Help 126
Finding good help for free 126
Working with your mortgage servicer 126
Avoiding help that hurts 127
Alternatives to Going Down with the Ship 128
What to do first 129
What to do for more serious problems 129
What to do to end matters 130
Managing a foreclosure 131
Strategic default: Stopping payments 132
Dealing with Deficiencies 134
Preparing for “Credit Winter” 136
Curing Medical Debt 136
Understanding new reporting and scoring rules 137
Reviewing your options for paying medical bills 137
Discovering how insurers get your medical information 138
Monitoring insurance claims for errors 138
Dealing with denied medical claims 139
Managing Student Loans 139
Default timelines 140
Loan forgiveness programs 140
Where to get help 141
The impact of the CARES Act on student loans 141
Avoiding Car Repossession 141
Repossession: What you can do 143
Dealing with auto loan default deficiencies 143
Coping with So-Called Acts of God and Other Things That Are Not Your Fault 144
Chapter 8: Filing for and Recovering from Bankruptcy 145
Deciding Whether Bankruptcy Makes Sense for You 146
Deliberating the bankruptcy decision 146
Adding up the pluses and minuses 150
Considering a debt management plan first 152
Understanding Bankruptcy, Chapter and Verse 154
Qualifying for and Filing for Bankruptcy 155
Qualifying for Chapter 7 155
Qualifying for Chapter 13 157
Managing Your Credit After a Bankruptcy 159
Telling your side of the story 159
Reaffirming some debt 161
Repairing your credit score 161
Establishing new credit 163
Moving forward with a game plan 163
Chapter 9: Repairing Credit Damage in the Wake of Identity Theft 165
Taking Fast Action When Identity Theft Occurs 165
Communicating with the right people 166
Protecting your identity through the FACT Act 169
Sending out a fraud alert 171
Blocking fraudulent credit lines 171
Getting and Using Credit After Identity Theft 172
Closing and reopening your accounts 172
Altering your PINs, passwords, and radio transmissions 173
Changing your Social Security number and driver’s license number 174
Part 3: Rebuilding Credit, No Matter Where or When You Begin 175
Chapter 10: Starting or Restarting Your Credit in Real Life 177
Debunking Misinformation about Banking and Credit 178
Why you need credit 179
Why credit is safe 180
Obtaining Credit: Starting Out on the Right Foot 181
Establishing a credit file without a Social Security number 182
Setting goals before you set out 183
Establishing a relationship with a financial institution 185
Using prepaid and reloadable cards 186
Fattening up your credit file 187
Avoiding high interest, fees, and scams 189
Overcoming Credit Fears and Mistakes 190
Qualifying for First-Time Cards and Lending 192
Getting a credit card 192
Using savings for credit 194
Considering Credit for Students and Military Members 195
Giving credit to students 195
Following military credit rules 197
Chapter 11: Ending Life’s Negative Credit Surprises 199
Keeping Your Credit from Hurting Your Job Prospects 200
Dealing with Rental Application Checks 201
Knowing what’s on your reports 202
Taking action 203
Qualifying for a Mortgage 203
Ordering your credit report and score 204
Looking at your credit file like a lender 205
Preparing to Purchase a Car 205
Arming yourself with information 206
Reviewing what to consider when you’re at the dealership 207
Unveiling the Relationship between Your Credit and Your Insurance Premiums 208
Understanding insurance scores 209
Getting a copy of your insurance score and insurance claim report 209
Figuring out what to do with your newfound knowledge 210
Taking other factors into account 211
Chapter 12: Protecting Your Credit During Major Life Challenges 213
Tying the Knot in Life and in Credit: A Couples’ Guide to Building Good Credit 214
Engaging in prenuptial financial discussions 214
Considering joint accounts 216
Managing joint debt 218
Avoiding money conflicts 219
Protecting Your Finances in a Divorce 220
Taking precautions when a split-up looms 220
Preparing your credit before heading to court 221
Protecting your credit in a divorce decree and beyond 222
Keeping Credit Strong While Unemployed 226
Preparing your credit for the worst-case scenario 226
Using credit when you don’t have a job 226
Protecting your credit lines 228
Curing Medical Debt 229
Reviewing your options for paying medical bills 230
Discovering how insurers get your medical information 234
Monitoring insurance claims for errors 235
Dealing with denied medical claims 236
Resolving Credit Issues After the Death of a Spouse or Partner 238
Understanding what happens to joint credit when you’re single again 238
Knowing exactly what your liability is 239
Building your credit record on your own 240
Fitting Credit into Retirement 240
Budgeting on a fixed income 241
Using credit for convenience 241
Part 4: Making Sense of Credit Reporting and Scoring 243
Chapter 13: Discovering How Credit Reporting Works 245
Grasping the Importance of Your Credit Report 246
What is a Credit Report, Exactly? 247
Revealing the facts about your financial transactions 248
Providing insight into your character 252
The Negatives and Positives of Credit Reporting 253
The negatives 253
The positives 255
Your Credit Report’s Numerical Offspring: The Credit Score 255
Cracking credit score components 256
The reasoning behind risk factors 259
Chapter 14: Understanding Credit Reports and Scores 261
Getting Copies of Your Credit Reports 262
Where to get your reports 263
What you need to provide 264
When to get copies of your credit reports 265
Tracking Down Specialty Reports: From Apartments to Casinos to Prescriptions 268
Perusing Your Credit Reports 271
Identifying information: It’s all about who you are 272
Accounts summary: An overview of your financial history 272
Bankruptcy public records: The most serious element in a credit report 273
Credit inquiries: Tracking who has been accessing your file 273
Account history: Think of it as a payment CSI 274
Your optional 100-word statements: Making sure your voice is heard 281
Correcting Any Errors You Find 283
Contacting the credit bureau 283
Contacting the creditor 283
Getting and Understanding Your Credit Scores 284
Ordering your score 285
Telling a good score from a bad one 287
Connecting pricing to your credit score 290
Knowing the reason for reason statements 292
Chapter 15: Monitoring Your Credit Reports and Scores 295
How Credit Monitoring Really Works 296
Understanding the Types of Monitoring Services Available 297
Making a Case for and against Third-Party Credit Monitoring 299
Monitoring on your own 300
When paid monitoring may be worth the time and money 301
Recognizing the protection you have already 302
Getting Your Money’s Worth from Monitoring Services 303
Setting Alarms, Alerts, and Freezes 304
Alarms 305
Fraud alerts 305
Credit freezes 305
Part 5: Successfully Managing Your Credit for Life 307
Chapter 16: Putting Yourself in Control of Your Credit 309
Determining Your Credit Style 310
Balancing Spending, Savings, and Credit Use 312
Spending on your terms 312
Saving for financial emergencies 312
Using credit to enhance your life 313
Remembering the Importance of Planning When It Comes to Your Credit 313
Zeroing in on the plans others have for your money 314
Developing your own plans for your future 314
Chapter 17: Taking a Sustainable Approach to Your Credit 317
Going Green: Treating Credit as a Renewable Resource 318
Recognizing your credit environment 318
Taking a closer look at the parts that make up your credit ecosystem 319
Sustaining Your Credit Ecosystem for Life 321
Funding college 321
Home sweet home 322
Credit on wheels 322
Steering Clear of Credit Pollution 322
Endangering your payment history 323
Clear-cutting your credit in bankruptcy 323
Outlasting a long, cold credit winter 325
Surviving and Reviving After a Credit Catastrophe 325
Understanding what happened 325
Rebuilding your credit ecosystem 327
Chapter 18: Safeguarding Your Credit with a Spending Plan 329
Appreciating the Benefits of a Solid Spending Plan 330
Deciding on Goals: Imagining Your Future as You Want It to Be 332
Setting the stage for planning 332
Categorizing your goals 333
Putting your goals in order 334
Building Your Vision of Your Future 334
Step 1: Counting up your income 335
Step 2: Tallying what you spend 336
Step 3: Making savings part of your spending plan 341
Step 4: Managing your credit to improve your spending plan 345
Step 5: Looking at your insurance options 346
Step 6: Planning for the IRS 348
Step 7: Planning for retirement 349
Using Cool Tools to Help You Build and Stick to a Spending Plan 351
Web-based financial calculators 352
Budgeting websites 352
Smartphone apps 353
Spending plan assistance 353
Adjusting Your Priorities and Your Plan 354
Chapter 19: Understanding Equity and Diversity in Credit 355
Benefitting from Financial Inclusion 357
Participating in the Financial System 358
Taking or Retaking Control of Your Credit 358
Educating Yourself on How the System Works 359
Tackling Debt 362
Student loans 363
Payday loans 363
Collections 364
Bankruptcy 364
Working Toward the Goal of Homeownership 364
Chapter 20: Knowing Your Rights to Protect Your Credit 367
Why You Have the Right to Credit Protections 368
The CARD Act: Shielding You from Credit Card Abuse 369
The Consumer Financial Protection Bureau: The New Cop on the Financial Beat 372
Safeguarding Your Credit Data through the FACT Act 372
The FDCPA: Providing Protection Against Debt Collectors 375
Controlling the contacts 375
Finding out about the debt 375
Stopping a collector from contacting you 376
Spotting prohibited behavior 376
Suing a collector 377
The CROA: Getting What You Pay For 378
Knowing what credit repair organizations must do 378
Understanding what credit repair companies can’t do 379
Exploring Other Protections 379
The ins and outs of payday loans 380
The details of debt settlement 382
The scoop on the statute of limitations 384
Chapter 21: Protecting Your Identity 387
Keeping Thieves at Bay 388
Getting on the technology train 388
Looking out for phishing scams 389
Safeguarding your computer data 391
Keeping passwords secret 392
Protecting your mail 393
Storing financial data in your home 393
Putting your credit information on ice 394
Shielding your credit card number 395
Catching Identity Thieves in the Act 397
Watching for early-warning notices 397
Early warnings from the IRS 399
Handling a collections call 400
Detecting unauthorized charges 400
Being denied credit or account access 401
Noticing missing account statements 401
Part 6: The Part of Tens 403
Chapter 22: Ten Consumer Protections Everyone Needs to Know 405
The Fair Debt Collection Practices Act 406
The Bankruptcy Abuse Prevention and Consumer Protection Act 406
Your Lawyer 407
Coronavirus Aid, Relief, and Economic Security (CARES) Act 408
Statute of Limitations Laws 409
Your State Attorney General 409
The Consumer Financial Protection Bureau 410
The Credit Card Accountability, Responsibility, and Disclosure Act 411
The Fair and Accurate Credit Transactions Act 412
The Federal Trade Commission 413
Chapter 23: Ten Strategies for Dealing with Student Loans 415
Knowing How Student Loans Are Reported Differently Than Other Loans 416
Dealing with the Collection Process 416
Identifying the Best Repayment Option for Your Situation 417
Taking Your Loans to Bankruptcy 418
Dealing with the Prospect of Default 418
Gaining Student Loan Forgiveness 419
Lowering Your Bill While You’re in School 421
Keeping Up with Your Loans After You’re Out 422
Setting Limits During the Planning and Application Process 423
Getting Help if You’re in the Military 423
Chapter 24: Ten Ways to Deal with a Mortgage Meltdown 425
Knowing When You’re in Trouble 426
Knowing How Your State’s Laws Treat Foreclosures 427
Nonrecourse or recourse 427
Judicial or nonjudicial 427
Deciding Whether to Stay or Go 428
Walking away 428
Working with the lender to exit 429
Staying the course 429
Tightening Your Spending to Stay in Your Home 430
Prioritizing Your Spending to Build Cash 431
Lessening the Damage to Your Credit 431
Knowing Who to Call 432
Beware of Scams 432
Beefing Up Your Credit 432
Consulting an Attorney 433
Index 435
