Credit Repair Kit For Dummies

Melyssa Barrett is Vice President of Identity Solutions at Visa, Inc., where she creates products to detect and predict fraud within consumer credit, debit, and prepaid products.Steve Bucci is a credit-scoring columnist for CreditCards.com and a syndicated columnist for Bankrate.Rod Griffin is Senior Director of Consumer Education and Advocacy for Experian, responsible for the company's national consumer education programs and outreach.

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