Table of Contents
Preface xi
Acknowledgments xv
1 Scratching the Surface 1
A Brief and Not Too Boring History of Credit 5
The Credit Bureaus 6
Credit Scoring Is Born 7
The Love Affair: FICO + CRAs 8
FICO Score Aliases and Ranges 9
Three Sides to the Story 10
But Wait, There's One More 10
Consumer Protections 11
The Fair Credit Reporting Act (FCRA) 12
The Fair and Accurate Credit Transactions Act (FACTA) 12
Rise of Consumer Debt and Credit Crisis 13
The New Guard: Dodd-Frank 15
The Credit Reporting Trail 16
How Your Actions Are Tracked, Compiled as Data, and Sold 17
2 Getting Prepared 19
The Practical 20
Getting Organized 21
Personal Laptop or Computer Security 21
Cloud Security 23
The Mental 24
Jason Womack's Focus and Goal-Setting Tips 25
Mary Joan Cunningham's Tips for Clarity and Goal Setting 30
Jim Hartness and Neil Eskelin's Time Management Principles 33
It's Time to Turn Your Credit Around 35
3 The Credit Report 37
Single vs. Tri-Merge Credit Reports 37
Accuracy by Region 38
Introducing: Barry Borrower 38
The Sample Credit Report 42
Getting Your Credit Reports 53
Your Options: Free vs. Paid, Scores vs. No Scores 53
4 The Credit Score 67
Anatomy of a Score 67
Payment History = 35 Percent 67
Amounts Owed = 30 Percent 68
Length of Credit History = 15 Percent 68
Credit Inquiries =10 Percent 68
Credit Mix = 10 Percent 69
What Scores Like and Don't Like 72
Payment History: Pay Your Bills on Time (35 Percent of Credit Score) 72
Amounts Owed: Keep Your Balances within Reason (30 Percent of Credit Score) 73
Length of Credit History (15 Percent of Credit Score) 74
Credit Mix (10 Percent of Credit Score) 74
Inquiries (10 Percent of Credit Score) 75
5 Checking and Correcting Your Credit Report 79
Checking Your Credit Report 79
Personal Information 79
Credit and Trade Lines 80
Inquiries 80
Crosscheck Your Reports 81
The Dispute Process 81
Reinvestigation and Re verification 82
Target Adverse and Negative Items 82
Target Erroneous Items 83
Dispute in Writing, Not Online 84
The Magic Number: 30 Days 85
Minimize or Separate Your Disputes per Letter 85
Send Your Letters to CRAs and the Original Creditor 86
Follow the Formula 86
Include Evidence, Only if It Helps 87
The Letters 88
Fraud Alerts, Credit Freezes, and Consumer Statements 93
6 Improving Your Credit Score 95
Credit Improvement Tips 95
Pay Bills on Time 95
Keep Your Older Accounts Open 96
Forget Older Derogatory Accounts 97
Mind Your Balances 97
Pay Down Your Debt 98
Mix Up Your Credit 98
Limit New Credit Applications 99
A Word on ChexSystems 100
Bank Account Alternatives 101
7 Managing Debt 103
Credit Card Debt Is the Costliest Debt 104
Debt Management Tips 104
Chris Welker's Tips for Getting out of Debt 105
What's the Best Way to Deal with Huge Credit Card Debt? 108
Debt Solutions 110
Settle, Consolidate, Manage, or Repair 110
Settling Your Own Debts 113
Job Loss 117
Bankruptcy 118
Your Rights 119
The Fair Debt Collection Practices Act 119
Get Validation 120
A Word on Student Loans 122
Student Loan Options 124
Student Loans and Credit 126
Why Deferment Is Preferable to Forbearance 127
8 Credit and Your Life 129
Credit and Your Home 129
The New American Dream 129
Housing Squeeze on the Horizon 130
The Sharing Economy 132
That Was Then: Subprime Mortgages 132
This Is Now: New Mortgage Rules, New (Safer) Subprime 134
Credit and Entrepreneurs 139
Credit and Business Loans 139
Startup Funding and Alternatives to Business Lending 142
Credit and Sendees 144
Credit and Employment 144
Credit and Love 147
Wrecked by an Ex 148
Important Questions 149
A Good Credit/Bad Credit Partnership 150
Marriage, Divorce, and Credit 151
9 Practice Makes Habit 155
Positive Credit and Money Behaviors 156
The Latest and Greatest Apps and Tools 157
Simple 157
Mint 160
Moneytrackin' 160
BillGuard 161
Check 161
For Small Business Owners and Entrepreneurs 161
Educational Resources 162
Investing 162
Endnotes 163
Get on Track with Positive Credit Management Behaviors 163
Notes 165
Additional Resources 173
Index 177
