Table of Contents

Basic Glossary of Terms 5

Debt and Credit 10
Credit Scores 13
How Does Marriage Affect Your Credit Score? 15
How is Your Credit Score Determined? 17
Your Credit Report 33
Get Started 38
PRBCPay Rent Build Credit 40
The Three Credit Bureaus at a Glance 41
Repairing Your Credit 50
Communicating With your Creditors 60
Debt Consolidation Loans 63
Debt Settlement 65
What is Loan Modification? 72
HELOC: Home Equity Line of Credit 75
How Do Creditors Collect Money 76




Consumer Protection Laws 79
New Credit 99
Identity Theft 102
Resources 107





Basic Glossary of Terms:

Adjustable Rate Mortgage (ARM)
A loan with an interest rate that is periodically adjusted to reflect changes in a specified
financial index. Many people are in trouble with their mortgages due to the low ARM
rates offered when they first got their mortgages or re-financed their mortgage. The
interest rate adjusts, usually up to a higher interest rate, which they cant afford or didnt
budge for.
Asset
A valuable item that is owned which does not have a loan or lien on it. For example: You
paid off your car, so it doesnt have a loan anymore. The value of the car is your asset.
Bankruptcy
A proceeding in Federal Court in which a debtor can get relief from payment of certain
obligations. Bankruptcies remain on a credit record for 7 to 10 years and can severely
limit a persons ability to borrow. Bankruptcy should usually be considered as a last resort
to escaping financial worries or to getting out of debt, because it causes severe damage to
your credit.
Creditor
An individual or institution to whom a debt is owed.

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Debt Consolidation
When a person takes out a loan to pay off all of his or her debt at one time
Debt Settlement
When debt is negotiated with creditors and paid off on a schedule.
Default (on a loan)
A loan is said to be in default when a borrower fails to make payments as agreed to in the
original loan document (called promissory note).
Discretionary Income
The money remaining from net income after essential living expenses are determined.
Escrow
A special account in which a lender holds monthly payments from the borrower to cover
property taxes, and/ or insurance (depending on how the account is set up). Sometimes
buyers/ borrowers choose this, and sometimes this is a requirement of the loan.
Fair Market Value (or Market Value)
Used to determine the price of things. The information used to determine the value is
based on the condition of the item, what similar items have sold for recently and the
demand for the item. Your Property Tax Assessment on your house is an example of the
Market Value determined by your city, county or state (whoever sends you your tax bill).
Kelley Blue Book is used to get an idea of what the value is for vehicles. An art or jewelry
Appraiser would determine the value of those items and so forth.
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WHAT YOU REALLY NEED TO KNOW: The value of anything is really only worth
what a buyer would actually pay for an item.
First Mortgage
The primary mortgage on a property that has priority over all other voluntary liens. If two
mortgages are taken out on a home, the first mortgage will almost always be at a lower
interest rate than the second.
Forebearance
Gives you a chance to delay or reduce payments for a short period of time, with the
understanding that another option will be used to bring your accounts current.
Foreclosure
The forced sale of property pledged as security for a debt that is in default. It is when your
bank repossesses your home if you are no longer making payments.
Gross Income
The amount of money coming into a household before any taxes, insurance, dues, union
fees, etc are taken out of your pay.
Identity Theft
When one person steals another persons personal information in order to commit fraud,
obtain money, or commit crimes in the victims name.
Judgement
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The decision of a judicial court.
Lien
A legal claim upon real property (like a house), or personal property, for the satisfaction of
a debt, usually placed upon the title to a property, in order to make the title unclean, or
unable to be transferred or sold until the debt is paid.
Lis Pendens
A recorded notice of pending lawsuit, filed with the clerk of routs in the county in which
the property is located.
Lender
A person or company who lends money for temporary use on co0ndition for repayment
with interest (i.e. the bank, mortgage company, etc...
Loan Modification
A change in any of the terms of the loan agreement. Preferred method of saving a home.
If a homeowner qualifies, a good portion of the past-due payments may be put at the end
of the mortgage
.
Mortgage
A written pledge of property that is used as security for the repayment of a loan.
Mortgagee
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A lender, which includes banks, credit unions, mortgage companies, etc
Mortgagor
The borrower or homeowner.
Private Mortgage Insurance
PMI: Private Mortgage Insurance is an insurance policy purchased by the homeowner
(you) that is provided as a means of protecting the lender (the bank) in case you default on
your loan.
Rate
Interest rate you pay on a loan.
Repayment Plan
When a borrower falls behind in mortgage payments, a plan that is negotiated to prevent a
foreclosure. Lets you repay part of your past-due payments each month in addition to your
regular monthly mortgage payment. Usually this plan will catch you up in 12 to 24
months.

Second Mortgage
A mortgage placed upon a piece of property. This lien is recorded behind the first
mortgage.

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Secured Loan
A loan that uses some asset as collateral in securing that loan.
Tax Lien
A legal claim placed against a property for the payment of back taxes.
Unsecured Loan
A loan that is not secured with any asset as collateral. These loans generally have higher
rates of interest.

Debt and Credit
Isnt Everyone in Debt?
Our society operates on credit. Even if it seems like it would be a great idea to operate
purely with cash, sooner or later, you will probably need credit. After all, it is very few
people who have enough money to pay cash for things like a house or a car, and those who
do, likely did not get that way by paying cash for everything their entire lives. The rich and
otherwise well off were either born into it, struck it lucky, or they worked hard and played
smart and were careful with their money, making smart decisions along the way. People
who have a good relationship with money understand just that, being fiscally secure is a
process, much like being in a healthy relationship is a process. It is not something that just
happens. It is something that is nurtured over time.
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When you use credit, you are borrowing money from banks or other lenders. This money
may be in the form of a loan, credit card, or some other source. Some people are able to
borrow a lot of money. They are able to take out large house loans, large car loans, and
have seemingly endless credit card limits. These people usually have good paying jobs,
pay their bills on time, are financially secure, have some assets, and have great credit
scores.
Individuals who have a lot of credit may or may not use all of the credit available to them.
Usually people who use all of their available credit have lower credit scores. Many people
who obtain a lot of credit and use too much of their available credit get too far into debt.
Getting too far into debt can cause many problems.
Getting too far into debt can cost you a lot of money in the long run by costing you way
too much money in interest. It can make it impossible for you to get out of debt, and it can
ruin your credit score, making it impossible or next to impossible for you to get necessary
loans, in the future.
This guide will inform you about credit, how to manage your credit, how to achieve good
credit, and how to repair your credit, if your credit is less than perfect now.
Credit and Risk?

When you apply for credit, whether it is something as minor as getting utilities hooked up
in your name, or something as major as a loan for a home, companies run a check on your
credit.
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Lenders want to find out how much of a risk you pose to them. In other words, they want
to find out what the chances are of you repaying your loan if they lend you money. They
will not lend you money if you pose too much of a risk to them. If you pose a moderate
risk, they may lend you money, but at a higher interest rate.




RISK









Banks and other creditors who are deciding whether or
not to lend you money like to determine how much of a
potential risk you pose to them. They want to give loans.
That is their business. They make money from giving loans
and getting interest. However, they also need to protect
themselves by determining if it is too risky for them to give
you a loan because of your poor credit history.
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Credit Scores
What is a Credit Score?

A credit score is a number, usually ranging between 300 -800, that lets a lender know how
likely it is that you will repay your loans. It is based on your past credit history. It is
sometimes called a FICO score, named after the company that developed the formula for
determining the score (Fair Issac Corporation).
You Dont Have A Credit Card or Any Loans; Do You Still Have a
Credit Score?

YES. If you have a bank account and bills that come, in your name, you, my friend,
have a credit score. Any (negative) past credit youve had will appear on your score for
approximately 7-10 years. Positive things can stay on your report, indefinitely.

What is a Good Score to Have?
There are no hard and fast rules for what determines a good credit score. In fact, what is
considered a good score varies by lending institution, but the following table is based on
an industry average.
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What do These Scores Mean?
Excellent: 750-800
You are a low risk borrower to the bank. You will probably be able to receive the lenders
best interest rate. If you are not offered the best rate, you should strongly consider
switching to a different lender. If you are taking out a loan, you will be able to borrow
quite a large percentage of the total cost of the home.

Good: 650-749
You will definitely be able to get a good loan. You will probably not be able to get a
lenders best rate. However, if you shop around a little bit, the right lender may surprise
Excellent 750 800
Good 660 749
Fair 620 659
Poor 350 619
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you. On the other hand, it is common for borrowers in this category to expect to pay up to
half a percentage point more than those with the best credit scores.
Fair: 620-659
You will still be able to find a loan with a fair credit score. However, you may be paying
up to 2% more in interest than borrowers with excellent credit. You may also need to take
some more time with your lender and provide extra documentation to support your loan.

Poor: 350-619
There are actually loans available, these days, for borrowers with poor credit. This does
not mean that people who have declared bankruptcy within the last 7-10 years, or who
have suffered from a recent foreclosure, for example, can necessarily find a loan. What it
does mean, however, is that if you have poor credit but have not had a major financial set-
back, you can still obtain a loan and use it to begin to repair your credit. If you have a
poor credit rating, there are many lenders who will lend to sub-prime borrowers. Thats
you. The bad news is, the rates will be high. However, if you can make regular payments,
you should be able to gradually repair your credit and refinance for a lower rate.

How Does Marriage Affect Your Credit Score?
Nearly every American adult has a credit score. Individuals maintain their own credit
scores, even once they are married. However, joint financial investments, loans, and
accounts will show up on both individuals credit reports. This is important information,
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therefore, when entering into business deals with others, as well as joint accounts with
spouses.

If you marry someone with a poor credit rating, this will not automatically affect your
credit rating simply because you are married. However, it could very well affect your
score indirectly, if you have joint accounts and if you apply for loans together. If your
spouse has poor money management skills, is irresponsible with debt, and runs up your
joint credit cards or fails to make payments on your joint accounts, both of your credit
scores will suffer, and your relationship will likely suffer, as well.

If your spouse owes money and is delinquent in his bills, or if he or she defaults on a
mortgage, even if it is solely in his or her name, you may still be held responsible for his or
her debt. Marriage is a partnership. This doesnt mean that it will affect your credit score
if your spouse has high debt and you have separate accounts, but creditors will come after
you to get their money if your spouse is not repaying what he or she owes.
If you are married to someone who has bed credit and it is negatively affecting you, in the
event that you get divorced, this will not necessarily go away. Debts incurred during your
marriage remain your responsibility.



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How is Your Credit Score Determined?

There are five basic components that are used in determining your credit. Each component
is assigned a certain percentage of your total score.

Payment History 35%
How well do you pay your bills?

Debt (Debt to Income) 30%
How much do you spend compared to how much you earn?

Length of Credit History 15%
How long have you been using credit, and have you used it responsibly?

New Credit 10%
Have you applied for a lot of new credit lately? Hopefully not.

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Types of Credit 10%
What type of credit do you have? Is it considered credit for necessary items such as a car
loan, home loan, utilities, major credit card, etc, or do you have a ton of department
store credit cards? You can guess which ones look more favorable on your credit report.


Payment History
THIS COUNTS FOR 35% OF YOUR CREDIT SCORE.

Payment history is a big deal for lenders. If they can see that you have a history of making
payments on time, this counts big, in their book. However, while an overall good credit
picture can erase a few late payments, especially over time, it is very important to try to
AVOID LATE MORTAGE PAYMENTS, if at all possible. These can significantly hurt
your credit rating.




PAY YOUR BILLS ON TIME!
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As soon as you get your bills, put them in one spot in the house.
This should be a spot that you see every time you walk in the door. It should
not be tucked out of the way, and it should not be somewhere that you will
bury under junk. Then, dont allow bills to hang over your head. Pay them
right away. You will feel so great when its done. As soon as you pay them,
file them.

File Right Away

Try this. Its amazingly simple, and whats better, it works! Put all of your financial
records together in one place. Invest in a file cabinet or better yet, file suitcases. Label file
folders, and every time you get new financial information, after youve addressed it, file it!
Youll be so happy the next time you need it when you find that its right at your
fingertips.
Some financial filing category ideas:
Gas and Electric
Water
Taxes
Life Insurance
Health Insurance
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Auto Insurance
Home Owners Insurance
Primary Mortgage Information
Secondary Mortgage Information
Private Mortgage Insurance (if you were required to get this)
*Make a note to cancel this when you have 20% equity in your home
Pay Stubs or Proof of Deposits (Separate file for each person)
Receipts and Information you will need for paying your Income taxes
Cell phone bills
Internet bills, phone bills, cable bills
Garbage or other services you may pay for
Car loans
Credit Card Statements
Retirement Accounts
Investment Portfolios
Bank Statements
Miscellaneous Bills

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Portable Filing

When I file, I love using portable filing suitcases.
These suitcases are perfect for storing all of your
important documents. They make filing convenient.
You can take the cases to bed, out in front of the
television, to the park..wherever.
Theyre about $8.00 at discount stores.

I have about a dozen of them, and I use them for family
photos, my kids school accomplishments, old letters
and greeting cards. They are a great organizational tool
and very economical and convenient to use.
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Debt to Income Ratio 30 %

This refers to how much you owe, compared to how much you earn. You may very well
have never missed a payment on anything in your life, but if you spend more than you
make, banks consider you risky. If they feel you are over-extending yourself, banks will
not want to give you a loan. Even if you make a lot of money, having a lot of debt makes
you risky investment for banks.



Lets Say that.
Your total take-home pay for your family is
$3200/ month after taxes. If you spend
$1200 on daycare, $1,300 on your
mortgage plus taxes, and $200 on utilities,
thats $2,700. A bank is going to assume
that you need the rest of your income for
things such as insurance, gas, groceries,
and other day-to-day living expenses.
They will view your income as stretched
too thin, to qualify for say, a new car loan,
even if you have never missed a payment
on anything, in your life.
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What Counts As Income?
Income from your job
Extra income from part-time jobs
Income earned from rental properties
Alimony
Child Support Payments
Social Security Benefits
Unemployment Benefits
Disability Benefits
Pensions
Retirement
Income from Hobbies
Payments being received from settlements
Any other sources of income for which you have
documentation

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The Benefits of Reporting Your Income:

Many people who do work in addition to their regular jobs (often called
side work), prefer to get paid in cash so they do not need to report this
income to the IRS and pay taxes on it.

However, if you do not report your income, you cannot claim it as
income for debt to income purposes. The interesting thing, however, is
that many times, with a little research and planning, reporting this extra
income can actually work out to your benefit in two ways. Reporting
extra income will allow you to claim more income for debt to income
purposes, and if you legitimize yourself a little, there are countless
write-offs you can claim on your taxes. You may be surprised to find
that claiming that extra income could actually save you money in the
long run.

Of course you should consult a tax professional to ensure accuracy
when taking these deductions, but the following are just some ways
that you could reap the rewards of claiming your cash.
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You can write off.

50% of the gas you use driving to and from jobs.
The depreciation on your car
The percentage of the mortgage you pay on the space in
your house you use as a home office
Any mortgage spent on the space in your home you use
for your work (i.e. if you are a seamstress, you can write
off your sewing room)
Any equipment you use for your business (sewing
machine, ironing board, etc)
Cell phone, home phone, any portion of these services
that you legitimately use for your business
A portion of the utilities used to heat, light, run your home
(b/c this is your home office and the place you do your
work)
A portion of home repairs done each year
A portion of food and beverages purchased while
working
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Lets say that youre a seamstress who does side work from your home. You have a 10x10
foot sewing room in your 1000 square foot home. You are legally allowed to deduct 10%
of your mortgage payment as a business expense. That is money you pay anyway. If your
mortgage is $1000 per month, that is $100 you can deduct.
Lets say that you have another room that you use as a home office. If this is the sole
purpose of this room, you can also deduct for this room. Perhaps this is another 10X10
room. Thats another $100.
You may also then deduct the portion of utilities that you spend heating and lighting the
space for where you work. So, if your gas and electric bill is $200 per month, you can
deduct 20% of that, or $40.

You have already found a way to deduct $240 per month.

You may deduct for phone service used for your business, 50% of gas and food while
working, so youre well on your way to making claiming your income the profitable
choice.

In addition to this, if you do repairs on your home, you can deduct 20% (or the comparable
amount of space you use for your business). If you do repairs on the space used for your
business, you can deduct the whole amount.
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TAX MUSTS!

Save your receipts for everything related to your business!

When you get paid cash for something, deposit the cash into your
bank account and make a note of the source of this income on the
deposit slip!

When filling out your taxes, take advantage of deductions.

Use an online program such as TurboTax. This is a great program
that walks you through everything. It is very inexpensive and has a
very friendly program for people filing for a home-based business.

Consider having everything double-checked with a tax-professional.
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Length of Credit History 15 %
If youve had credit for a long time and done well with it, it shows banks that you are
responsible with your credit, and it makes you a good risk.

New Credit 10 %
New credit can negatively affect your score. If you open up too many new credit cards in
a short period of time, especially if you have a short credit history, you can make yourself
appear as a greater risk to lenders. You can imagine why lenders dont want to think of
you frantically running around trying to get as much credit in as many places as you can.
Even if this is not the case, if you apply for a lot of new credit in a short period of time,
this is the picture that lenders are going to see.
Types of Credit 10 %
A combination of different types of credit can improve your score. For example, utilities
in your name, a credit card, and a car loan, all of which you pay on time, makes you a
much better risk than a consumer with 14 department store credit cards. Having THE
WRONG TYPE OF CREDIT CAN HURT YOU, especially if you dont manage it
correctly.



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Take a moment to take the following quiz.
This quiz will not give you an in-depth look at your credit, but it will allow
you to view your credit from a lenders perspective. And it will take less
than five minutes.
Without checking any records, from the top of your head, choose the best
response for each question. Each question has a point value assigned to it.
When you are finished, add up your total.

1. When you get a bill, do you

A. Pay it electronically and have a system set up to protect you in
case of accidental overdrafts (0)
B. Pay it within 2 days and file it immediately afterward (1)
C. Put it somewhere you can see it and pay it before it is due (2)
D. Put it somewhere and lose it, and pay it before the grace period is
up (3)
L. Forget to pay it and end up paying late fees on it (4)

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2. If you ever forget to pay a bill and it becomes late, do you

A. Immediately call the company, explain why its late, apologize,
explain that you are sending the payment immediately, and ask
that the late fee be waived, then send the payment right away? (0)
B. Send the payment right away once you realize it is late. (1)
C. Figure, its late now anyway, you may as well send it tomorrow. (2)
D. Stress about it and put it off because now you figure youve just
ruined your credit even more. (3)

3. If you suddenly lost your job, would you.
A. be able to keep making all of your necessary payments for the
next 6 months? (I know I couldnt) (0)
B. be able to keep making all of your necessary payments for the
next 3 months? (1)
C. possibly be late on a payment or two, but more or less be able to
keep up until you were back on your feet again (2)
D. run up huge amounts of debt on your credit card and borrow
money from everyone you could, miss payments, but still manage to
keep your house, and or car, if you have one (3)
E. fear that you would quite possibly lose everything you have (4)


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4. You opened your oldest credit card..
A. when you were 18 years old (i.e. old enough to obtain credit on
your own), and it is the first credit card that you opened.(0)
B. after you turned 18, but it is still the first credit card you had (1)
C. quite some time ago, but it is not the first credit card you had (2)
D. fairly recently (3)

5. In the past year, you have.
A. not applied for much new credit because you have plenty of
established credit that you can use if you need it. (Do not count home
loans that you have been approved for) (0)
B. applied for one new piece of credit (one new loan, one new credit
card, etc) (Do not count home loans that you have been approved
for (1)
C. applied for two new pieces of credit (Do not count home loans that
you have been approved for (2)
D. applied for three new pieces of credit (Do not count home loans
that you have been approved for (3)


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6. Count your credit cards. Dig in your purse or wallet, dresser
drawers, wherever you may have put them aside. How many credit
cards do you have?
A. two, and they are major credit cards, such as Visa, Mastercard,
Discover, American Express, Citibank, etc (0)
B. three, and they are major credit cards, such as Visa, Mastercard,
Discover, American Express, Citibank, etc (1)
C. three to four, and at least one is from a store. (2)
D. three to four, and at least two are from a store (3)
E. more than four, and at least two are from a store (4)
F. more than four, and at least three are from a store (5)


0-5: Excellent: Where were you when I needed you?
6-11: Good : Youre on the right track to maintaining great credit through
life.
12-17: Fair: Your money management skills could use some work, but I
wouldnt be writing this book if I hadnt been there myself.
18-22: Poor: Today is the day for a new beginning.
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Your Credit Report
What is on Your Credit Report?
When your credit report is requested, the credit bureaus send your credit score along with
any major reasons that your score may be lowered. Common reasons are the following:
Youve had a major setback such as a bankruptcy or foreclosure.
You have a history of having trouble paying your bills.
You have a lot of debt compared to your income.
You have recently opened many new accounts.
You are currently behind on payments on one or more accounts.
You dont have a long enough history of established credit.

Major Setbacks to Your Credit
Bankruptcy
Declaring bankruptcy should be done only as a last resort. It should not be seen as an easy
way out, because it truly is not. You will lose nearly everything, and your credit will
suffer tremendously. If you do declare bankruptcy, it will stay on your credit report for 7-
10 years, and for the first two years after you declare it, it will be hard for you to get any
credit at all. The best thing you can do for yourself after declaring a bankruptcy, however,
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is as soon as you qualify, and as soon as you are in the position to do so, begin rebuilding
your credit. How do you do this? First, get a secured credit card and manage it responsibly.
Once you are successfully managing your secured credit card, apply for a small loan. If
you get approved, take out the loan, and pay it back right away. Do this a few times, and
be responsible and consistent about it, and your credit will slowly, but surely, begin to
improve.

Foreclosure
Foreclosure is the legal proceeding in which a bank or other secured creditor sells or
repossesses a parcel of real property (immovable property) due to the owners failure to
comply with an agreement between the lender and borrower called a mortgage or deed
of trust. Commonly, the violation of the mortgage is a default in payment of a
promissory note, secured by a lien on the property. When the process is complete, it is
said the lender has foreclosed its mortgage or lien.
A foreclosure will also stay on your credit report for 7-10 years. Lenders will view you as
a high-risk borrower if you took out a home loan that you were unable to maintain. If you
have gone through the unfortunate experience of a foreclosure, it is important to begin to
slowly rebuilding your credit as soon as you can. You can do this in the same way as
someone who has had to declare bankruptcy. Start small. As soon as you qualify for
credit, make sure you can handle it, and use it to start to prove your credit worthiness.
Your score will start to slowly improve.

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Little Things That Cause Hidden Dings

Credit cards that you dont even useget rid of them.
Every time someone checks your credit, it is noted by the credit bureaus, and while its not
a huge deal, avoid extra and unnecessary credit checks.
Online loan companies that offer to give you rate comparisons can affect your credit, for
this very reason. They may run a credit check on you over, and over, and over, with each
loan they compare for you.
When you use credit to get deferred payments and then dont pay it off in time (see the
following example)

How Long Does Information Stay on Your Credit Reports?
Positive information stays on your credit bureau reports indefinitely. Although
information about an account comes off after about seven years if no new information is
added.

Negative information, such as late or inconsistent credit payments, will stay on your credit
report for at least seven years, as does public record information such as tax liens and
delinquent child support payments.
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Bankruptcies, foreclosures, and judgments can stay on your credit report for up to ten
years, and information regarding a criminal conviction has no time limit. Most inquiries
stay on a credit report for up to two years.

WHAT YOU REALLY NEED TO KNOW: There are NO rules or laws that say how
long information, good or bad, stays on your credit report!

How Do Lenders Get My Credit Report?

There are three credit bureaus that keep track of everyones credit. They are Equifax,
TransUnion, and Experian. Whenever a lender checks your credit, they will check it with
all three. When you check your own credit, you need to get copies of your report from
each of the three bureaus.

Who Can Check My Credit Report?

Anyone with a legitimate business can check your credit report for a legitimate business
purpose. The following list is not complete, but it is only meant to be an example of types
of businesses that are allowed to check your credit report.
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Landlords can check your report so see if you are eligible to rent from them under their
standards.

Banks will check to see if you qualify for a loan with them.

Stores will check your report in order to decide if they want to give you in-store financing.

Potential Employers can check, with your written consent, to find out if you are
financially responsible.

Car Dealerships will check your report before offering financing.

Insurance Companies will check your credit report. People with better credit will get
better rates on insurance.


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Get Started
Obtaining your own Credit Report

Any time you are denied credit, you have the right to know why, and you have the right to
see a copy of your report. You are also able to get a copy of your report, yourself. Unlike
when others check your report, your score is not dinged when you check yourself. There
are many companies that advertise this as a free service. However, there are a few that
offer completely free and legitimate credit reports. One reputable site that I know of is the
following. http://www.annualcreditreport.com
You can do this once a year. Remember, this site offers you a FREE and LEGITIMATE
report.
If you need to get your credit report more frequently than once a year, you can contact any
of the three bureaus to get a copy. The easiest way to do this is to go directly to their
websites
www.experian.com
www.transunion.om
www.equifax.com

38




Lets Do It!

If you dont have a current copy of your credit report, there is no better time than right
now to get one. I know that the hardest part of tackling this can be getting started, but take
a deep breath, find a comfy spot in your house and take the first step to repairing your
credit. Get a current copy of your report.
If you havent gotten a copy yet this year, you can get a free copy at
http://www.annualcreditreport.com .
If you have already gotten a credit report this year, but you feel that it is out of date, it is
well worth it to spend the money to get another copy of your report. Go online and
purchase a copy, and begin the process of nurturing your credit back to health. The scariest
part for all of us is getting started.






Great Job So Far, Youre on Your Way!
All this financial stuff can be very stressful!
Do something nice for yourself. Take a hot bath, go for a walk, or relax in
your favorite way. This was probably really tough. I know it was a
challenging obstacle for me. Now you can really begin to learn about how
credit works and you can apply it to yourself as you begin to repair your
own credit and heal your financial worries.
There is hope and there is help!
39




PRBCPay Rent Build Credit
In addition to the three main credit bureaus, a fourth bureau opened its doors to allows
individuals to voluntary build positive credit. PRBC stands for Pay Rent, Build Credit. It
allows individuals and small business owners to build their credit scores through positive
actions that they voluntarily report.
Equifax, Experian, and TransUnion do not automatically report on-time payments for
common bills that you pay such as rent, telephone and utilities. These bills will only show
up on your regular credit reports if you are in default. If you enroll in PRBC, by paying
these regular bills each month, you build a positive credit history. The following list is an
example of some of the bills you can report to PRBC.





It is free to start an account with PRBC. Just like the other three bureaus, PRBC makes its
money when creditors check your report. Because it is less well known and less common
than the other three, if you have a credit report with PRBC, you will likely need to request
that landlords and lenders check your PRBC credit report, as they will not automatically
do so on their own.
Rent
Phone
Utilities
Insurance
Payroll
Cable
Daycare
Cell Phone
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The Three Credit BureausAt a Glance
Each of the three bureaus has a web site that provides information. Some of the web sites
are more helpful than others, but each provide information for consumers on how to check
your credit report, how to deal with problems or errors in your report, and how to find
answers to other questions you may have.



http://prbc.com
1-(877) PRBC-123
41




Equifax: www.equifax.com
Number to call to obtain credit report: 1-800-685-1111
Number to call for disputes: Found on bottom of credit report
Number to call for identity fraud concerns: 1-888-766-0008

TransUnion: www.transunion.com
Number to call to obtain credit report: 1-877-322-8228
Number to call for disputes: 1-800-916-8800
Number to call for identity fraud concerns: 1-800-680-7289

Experian: www.experian.com
Number to call to obtain credit report: 1- 888 397 3742
Number to call for disputes: 1-888-397-3742
Number to call for identity fraud concerns: 1- 888-397- 3742









Equifax
Equifax has a great question and answer page. It lets you know exactly which types of
errors you can dispute online. To dispute an item online, you need to have a current copy
of your Equifax credit report. This report will have a 10-digit Report Confirmation
number on top. Having the number makes it easier to initiate a dispute online. To initiate
an online dispute with Equifax, simply follow the instructions on the web page and fill out
the online form.
41
42





Equifax allows you to dispute the following items online, over the phone, or by mail:

Credit Accounts
Bankruptcy
Collection Agency Disputes
Liens or Judgments

Equifax does not allow you to dispute the following items online. You must dispute these
items over the phone or by mail.

Name
Current address
Previous address
Social Security Number

To dispute items over the phone, you will need a current copy of your Equifax credit
report. This report will have a 10-digit Report Confirmation number on top. This number
is absolutely necessary to begin the discussion over the phone. Of course you are free to
43




dispute any of the above. If you wish to dispute errors on your report in writing, Equifax
offers a form for you to print. You may fill out this form and send it in to the company.
When sending it in, make sure to include your Credit report number, along with any
documentation that would help support your case.

TransUnion

TransUnion also has online services to help you deal with disputes in your credit report.
TransUnions online dispute process is interactive and very straight-forward and easy to
use. This bureau also has a customer service center that will help you deal with problems
over the phone 1-800-916-8800. The process for dealing with credit disputes with
TransUnion is similar to Equifaxs process.

TransUnion allows you to dispute the following items online, over the phone, or by mail:

Credit Accounts
Bankruptcy
Collection Agency Disputes
Liens or Judgments

44




TransUnion does not allow you to dispute the following items online. You must dispute
these items over the phone or by mail.

Name
Current address
Previous address
Social Security Number



Experian

Experians web site is the least informative of the three. This bureau does, however, also
offer online services to help you deal with disputes in your credit report. Experians online
dispute process is fairly straight forward and easy to use. This bureau also has a customer
service center that will help you deal with problems over the phone (1- 888- 397- 3742).
They also have a form to print to dispute errors by mail. The process for dealing with
credit disputes with Experian is similar to TransUnions and Equifaxs process.
Experian allows you to dispute the following items online, over the phone, or by mail:
43





Credit Accounts
Bankruptcy
Collection Agency Disputes
Liens or Judgments


Experian does not allow you to dispute the following items online. You must dispute these
items over the phone or by mail.

Name
Current address
Previous address
Social Security Number




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Mistakes on Your Credit Report

Its a good idea to check your credit report from time to time to make sure all information
is accurate. Errors can, and do, occur. A good time to check your reports is before
applying for a mortgage, auto, or other loan, or if you get denied a loan and are unsure as
to why. Correcting errors beforehand, however, will make your loan application process
much easier. If you have been denied credit and have not reviewed your credit reports,
you should do so to make sure the information on the report is accurate. You are entitled to
receive a free copy of your report if you were denied credit.
When you find something wrong in your credit report, you have the right to challenge it.
Submit your challenge to each of the three credit bureaus.
You may do this one of three ways:
Over the phone
Online
In Writing.
Some errors can only be disputed certain ways, but each of the three bureaus has a very
helpful website that lets you know what kinds of errors can be disputed in which ways.
Include copies (not originals) of any documents that support your position. By law, the
credit bureau must include this in your file, investigate your complaint (unless they
consider it frivolous), and either verify the item in question, or remove it from your file.
47




At your request, the credit bureau will send a corrected copy of your report to anyone who
received it in the past six months.
What if you get denied a loan, or you order a copy of your credit report, only to notice that
there is actually a mistake on your report. Is there anything that you can do about it? Yes
there is.
Another way to guard against mistakes is to sign up for an online credit report monitoring
service. If you sign up for a credible service, you can monitor your report and track any
changes with the touch of a button. If you hire a service, youll have to pay them, but the
information they can provide you will be accurate, constantly updated, and it will save you
a lot of headaches.
Each of the three credit bureaus offer credit monitoring services. If you chose to sign up
for one, you dont have to sign up for all three. One service will cover all of your credit.
48





In a nutshell, if there is a problem in your credit report, you will need to
dispute it with each of the three bureaus. You will need your credit report
from each separate bureau. You will need to know your credit report
number (this is located on top of each report.

If you prefer to tackle things online, each Credit Bureau has a website
that will walk you through the process. It tells you which issues you
can address online (credit accounts, bankruptcy, collection agency
disputes, and liens or judgments).

If you call an agent on the phone, have your credit report number
ready.


Have all documentation ready to support your discussions or disputes
before you begin the process.

If you prefer to make your disputes in writing, make sure to include
your credit report number and copies of all support documentation.


Each of the three bureaus has a form you can download to make
your written dispute easier.

Never dispute anything that is 100% accurate. This is Fraud.

49





Repairing Your Credit
Healthy Ways to Fix and Maintain Your Credit
The hardest thing about repairing your credit is that it takes time, and once you repair it,
you need to keep at it. Remember the relationship analogy. You must remember to keep
aware of your credit and not neglect it, once youve fixed it.
Pay your bills on time. This will show lenders that you are responsible and that you take
your financial obligations seriously. Remember, the fact that you pay (or do not pay) your
bills is worth 35% of your credit score. In addition to this, if you pay on time, youll avoid
excess late fees and save yourself money this way, as well.

Avoid getting excess credit, even if its Ohhhh so tempting. It is so easy to apply for
extra credit cards in stores, for example, and vendors know this. If you dont have the cash
available to get the pair of leather boots you want, or the new Craftsman drill, it can seem
like a great idea to take out a new Boston Store or Home Depot Credit card and save 10%
on your purchase that day, as well! But stop and think! Are those items really worth it to
you? Probably not. If you dont have the cash, you probably wont be able to pay the
credit card bill right away. This means that you probably wont save 10% anyway,
because youll end up paying interest. Furthermore, a pair of boots (I dont care how nice
they are), or a drill (I dont care how many bits it fits), is not worth the potential damage it
could do to your credit.
30





Pay down your debts. Lenders look at how much credit you have extended to you versus
how much credit you are using. This is called your available credit. Youve heard the
term, maxed out. If youre maxed out, youre using all of your available credit. Imagine
this scene.

Youre sitting in a nice restaurant with a group of people. Youve just finished a great
meal. The table has shared three bottles of wine, and youve had the waiter put one on
your bill. The waiter delivers the bills, and you pull out your credit card and stick it in the
slot in the folder. The waiter comes back after a short while, hands the other people at the
table folders with receipts, and he leans over and quietly whispers, Im sorry Sir, your
card has been declined. You ask him to run it again, but he explains that he ran it several
times. He apologizes and asks if you have another card. Slightly embarrassed, you pull
out another card. However, he again returns. The same problem has occurred. Your credit
cards have been maxed out. You have no available credit left. One of your friends picks
up the bill.

Lenders want to know that you have some leeway. If you can keep your balance at around
50% of your available credit, thats great. This means, if the credit available on your card
is $2000, try to keep a balance of no more than $1000. It is ideal to pay off your balance
every month, but if you cant try to carry as small a balance as possible. Even if you have
a $2000 limit on your credit card, an do you almost always have a balance of $1800,
lenders will be less inclined to extend a loan to you than if you had a balance under $500.
31




When paying down debt, it can definitely make more sense if you follow these simple
guidelines.
Start paying down your largest debt first. By doing this, you will be getting back a greater
percentage of your total available credit.

Pay off your highest cost credit cards first, or consider switching high cost cards to low
cost alternatives, if it does not negatively affect your credit in other ways (more on that in
another section).

Consider keeping the credit card that youve had the longest. Longevity and stability
establish you as being a responsible borrower in the eyes of a lender. If this long-standing
card has a high interest rate, use it for very small purchases. For example, consider using
it only for filling up your car with gas. They resolve to pay it off in full every month. This
way, youll avoid paying interest on it, and you will help your credit score.





32



















eclJe Whlch Mujor CreJlt CurJx to Keep

1. How many major credit cards do you have (Mastercard, Visa, Discover,
American Express, Citibank, etc..)

2. List your cards below. List the current balance you are carrying, if you
dont pay it off each month. If you pay it off each month, list $0. List the
interest rate that the card charges you, and list the length of time youve
had the card. This will help you in deciding if you are carrying too many
cards, and if so, which ones you should strongly consider getting rid of.

Card Name Balance Interest Rate Months Owned






3. Formulate a plan to limit yourself to 2 well-chosen cards. Then use them
for things you need, not things you want. Pay the balance in full, whenever
possible, and always keep a lot of available credit open to show lenders that
you are not over-extended.
33




Another reason to pay down your debts is because having too much debt leaves you spread
way too thin should anything unexpected or unfavorable occur. Perhaps you are able to
manage your debt given your current situation. For example, you may be married and
have a double income. But imagine what would happen if you got a divorce or if one of
you lost your job. Statistics tell us that when life gives us something unexpected, those
who are not burdened with debt are able to cope and recover from it much more quickly
than those who are.

4. Avoid buying on credit, in the first place, if you dont need to. Use cash whenever
possible, and if you dont need something, wait until you have the money to buy it
outright. Otherwise, you are paying far more than the price on the price tag, if you dont
pay it off right away.

5. Build a range of quality credit types. It is a good idea to have a range of quality
credit types. While it is definitely important to have the type of credit you can handle,
more significant types of credit carry more clout with lenders. Ideally, if you had one or
two major credit cards and a home loan and a car loan that you managed well, this would
go a long way to establishing or maintaining your credit.




34




6. Close all accounts you dont use, except for the following reasons.
If you have old accounts that you dont use, close them. The only reason to consider
keeping an account open is if you think you may need a similar account in the future, or if
it is an old account that shows a really excellent credit history for you. If you think you
may have a need for the account or a similar account in the near future, it is unwise to
close the account.
Lets say you have a Home Depot or Lowes Card. You havent used it in three years.
Normally, I would advise you to close it, but if you know that you are going to be
undergoing a major home renovation project this summer and will be financing some of it,
then keep it open. Dont close an account, only to apply for a similar one months later.
This will hurt your credit score far more than it will help it.
If you have had a credit card for a number of years, it can be a big benefit to your credit
score. Lenders look for longevity and stability. Dont rush to close a long-standing
account, especially if you have been able to pay down the balance. Consider keeping a
small balance on it that you pay off, in full, every month. For example, use it only for gas,
and make sure to never miss a payment.





33




Become Financially Organized

Should You Go Electronic?
Consider setting up electronic deposit with your bank, if you dont have it already, and
contact your bank or check its web site to see if it offers automatic web pay. Having your
paycheck automatically deposited is great. It saves you time and hassle, and it makes sure
that your money goes right into your savings account. You will still receive advice of
deposit so you know that the deposit has been made.
Then, a neat idea is to pay yourself. You can set up an automatic web pay to have money
drawn from your weekly paycheck and deposited into your checking account.

Make Online Banking Work For You

Now, heres the catch with electronic banking. Since everything is automated, there can be
time delays, oversights, and overdrafts, so here are some interesting facts you should know
and some precautions you should take to make online banking a smart choice.


36




Late Fees, Overdrafts, and Bounced
Checks

Did you know?
Did you know that when you use your credit card,
there is a delay in the transaction?
Did you know that when you use your debit card at
the gas pump, the bank only recognizes that you are
spending $1? Everything that you spend after that
is taken out, regardless of whether or not you
actually have the money in your account or not.

Did you know that you might not realize that your
credit card is maxed out until it is too late and you
are sitting in a restaurant, youve finished your
meal, and your credit card suddenly gets declined?



My own bank
representative told me,
off the record, that the
entire payroll at the bank
where he works, is paid
by late fees, overdrafts,
and fees from bounced
checks!

If youve ever been
charged $25 to $35 for a
bounced check,
because you didnt
balance your checkbook
(and in reality, weve all
been there), that money
goes right to the banks
payroll.

There are ways to
protect yourself from
this. Look into setting
up overdraft protection
with your bank so that if
your checking account is
depleted, your savings
account can
automatically cover the
deficit. Its worth it to
pay a small amount of
money for overdraft
protection.
37






















What are some ways to cover overdrafts?

1. You could pay for overdraft protection. This is available at most, if
not all banks for a fairly reasonable fee. It would definitely be made
up for it saved you the fees and hassle of just one to two bounced
checks.

2. Some banks and credit unions offer free overdraft protection. Shop
around if this is important to you.

3. Link your checking account to your savings account. If you overdraw
your checking account, your savings will pick up the slack. (This
option is less desirable, however, because it makes it too easy for
you to have access to the money in your savings account.

4. If you have good credit, you can set up an overdraft line of credit with
the bank. If you overdraw on your checking account, youre the
excess will be charged against your line of credit. (The drawback to
this option is that lines of credit can have high interest rates. You
want to make sure that you dont begin relying on your line of credit
to pay your regular bills).

5. If you have a credit card with the bank, already, tie your checking
account to the card. This is the same idea as the line of credit. It
has the same benefits and the same drawbacks.
38




Positive Steps Towards Improving Your Credit
Improving or repairing your credit is a process that focuses on improving the way lenders
look at you as a credit risk. Once you have addressed any possible mistakes that may be
present in your report, if you wish to truly begin the mending process, repairing your credit
report will likely take some work. If you think your credit history needs repair, its time to
take some positive steps.
Begin by developing a budget that you can stick to.
Set up a debt workout plan with each creditor.
Apply for a secured credit card. A secured credit card is a backed by deposits by a lending
institution. It may only offer a small credit limit initially, even less than an amount you
are required to deposit. By charging and making payments regularly, you build a better
credit history. In turn, your score will increase.
Apply for a small loan that you will be approved for, and repay it immediately.






39




Communicating With Your Creditors

Although you might feel like your creditors are now your enemies, the truth is, everyone
involved wants to work something out. Banks and other institutions that lend money are in
the business of making money. They make money by charging interest on loans. Loans
make lots of money for the banks. It is a big headache for banks or other financial
institutions to foreclose on a house, to deal with bankruptcy, or to turn you over to
collection agencies.
Lenders want to help you fix your credit situations. They will always work with customers
who take the initiative to communicate financial hardships. But it is important that you are
proactive. Dont wait for your creditors to contact you. Contact them right away.
For most of us, myself included, we have a natural tendency to avoid uncomfortable
conversations and situations. You may avoid communicating because you are too
embarrassed, anxious, or you dont know what to say. Using this guide will give you the
knowledge and skills to fix your credit problems.
You will likely find that the more you talk with the same people, the better your
relationship with them will get. In fact, one time, my bank force closed one of my
accounts because I had bounced too many checks and I had other problems with it as well.
I went in to speak with a teller about opening a new account (which she was not going to
do), when the branch manager saw me, waved, and said, Oh, thats just Laura, go ahead,
open it back up. Of course it was a little embarrassing for me, but it goes to show that
personal relationships with people still do mean something in todays world. So, stay with
60




the same bank, and talk with the same people. Make sure that the employees there can put
a face with your name.
Write it Down

Always make notes of your conversations with any creditors or representatives with whom
you speak. Use the Notes section in the back of the Guide so you can all of your
information in one place. Every time you talk with someone, write down his or her name
and telephone extension, and the date and time of your conversation. You should also take
notes on what the conversation was about. You can be sure that the representative will be
taking notes, as well.
Make sure that you understand exactly what the representative is telling you. If you dont,
dont feel silly about asking questions. Its funny, but the longer you talk to someone, and
the more questions you ask, more often than not, the easier it gets, and the better rapport
youll build with that person. Repeat what the representative told you to make sure that
you are clear, and then WRITE IT DOWN.
Write down the dates and times you fax, email, or mail any document. Write down
exactly what you included each time you send something. Youll be able to follow up
much better if you keep good records, and when you make a call feeling prepared and
knowing what youre talking about, youll be much more confident about doing so.


61





Ask Creditors to Waive Late Fees

Creditors are generally willing to waive late fees is you are a good customer who pays on
time but you happen to miss a payment. A friend of mine was doing some major home
remodeling projects on her home. She and her husband had a joint credit card with a local
home improvement store that they had obtained a few years earlier. They had not used it
for a while and they both more or less forgot that they had it. When they started
undergoing their home renovations, each of them applied for that same store card
separately. He had gone in and made a major purchase and realized that applying for a
card seemed like a good idea. He applied and was approved. She did the same thing on a
separate occasion. Neither one of them communicated this with each other. Meanwhile,
the still had their original joint account, as well. It is actually quite amazing that they were
able to do this, but believe it or not, they were. They soon communicated and realized that
each had an account. This was fine with them. They werent thinking about credit score,
only about deferring payments, etc They used the cards only for major purchases of
$299 or more, in order to defer payments without interest. They ended up getting many
bills from the home improvement store and inadvertently missing some payments, because
they thought they had gotten billed twice (not realizing they were being billed for separate
accounts). They had more than one late fee. They called the store and spoke to them
about it. Even though they had multiple late fees, because they explained the situation and
that they were paying immediately, when the couple asked that the late fees be waived, the
store complied.
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Debt Consolidation Loans
Individuals who have a lot of debt from multiple creditors often consider taking out a debt
consolidation loan to help them get out of trouble. A debt consolidation loan combines
your various individual debs into one lump sum and allows you to make single monthly
payments to one creditor, rather than all of your creditors.
Some of the benefits of a debt consolidation loan is that there is less to keep track of, all of
your creditors are paid off (except for the new loan), your monthly payments may be more
manageable, and sometimes it is possible to get a lower interest rate than you had before
(if a lot of your debt was from high-interest credit cards, for example).
Some of the drawbacks to a debt consolidation loan are that you are taking out more
credit, you may end up paying a higher rate of interest than before, and you may end up
paying more in the long run, when you factor in the interest and time it takes you to pay
off your new loan.
Debt consolidation loans can be secured or unsecured, depending on what you qualify for.
A secured loan means that you need to take out the loan with a piece of property or another
asset serving as collateral, in the event that you should default on the loan. This means
that if you were unable to pay the loan back the lender would be able to take that asset as
payment. An unsecured loan is a loan that does not have any assets serving as collateral.
These are harder to get and you will pay the price of a high interest rate.



63




When considering debt consolidation, decide if it will ultimately help or hinder your
situation. If it will benefit you by allowing you to pay off your creditors and avoid
getting behind on your payments, it may well be a good idea. The trick is to find a
service that will not charge you high fees to obtain the loan and to find yourself a loan
that will not charge you an arm and a leg in interest.

Debt Settlement

Oftentimes people in debt are unable to afford a debt consolidation loan. It is difficult to
obtain a secured loan if you have no property to use as collateral, and it is costly and often
impossible to obtain an unsecured loan, especially if you have poor credit already.
Furthermore, even if you are able to obtain the loans, the payments can still be too high for
people to afford.
Another solution that people in debt seek is debt settlement. This is a process in which the
person in debt hires someone to negotiate with his creditors on his behalf. The debt
settlement representative will negotiate payment plans with each creditor and set up a
schedule so that each creditor is paid off over time.
Entering into an arrangement like this will not protect you from legal action that creditors
may choose to take. However, even creditors know that they cannot get money from you
that you do not have, so if they feel as though they are getting as much from you as they
can in this way, they will be less likely to take you to court, wasting their time and money,
in the process.
64







The Best Way to Get out of Debt..
Spend less than you bring in.
63
Really Important Legal Resource Information!
A good resource for legal advice is Pre-Paid Legal Services, Inc. They
provide access to families and individuals all across North America to a
national network of attorneys who cover all areas of law. Pre-Paid Legal
Services offers monthly memberships for whole families for as little as $17.00
per month! Its a fantastic program and I use the benefits frequently!
They cover issues such as legal questions, document review, traffic issues,
wills and estate planning documents, and more, all without additional charge
besides my monthly payment!
You can learn more about them at: http://www.prepaidlegal.com or visit
my web site: http://www.prepaidlegal.com/info/lauraschuster or ask
about it from the person you got this program from.





SNIFFING OUT FRAUDS

Most firms that advertise that they
WIPE OUT CREDIT CARD DEBT are not legitimate!

The best way to find a legitimate company is to research and read
about the services they provide. Once you feel confident that
youve done your homework and picked a good one, contact the
Better Business Bureau to find out if they are legitimate and if there
have been complaints made against them.

If they are not legitimate, start over.
Finding a reputable company takes research, but by doing
your homework and checking their background,
you will find someone who can help.

66

ATTENTION
Certified Home Redemption Specialists:

The Home Redemption Institute is forming alliances
with two major professional Credit Restoration
companies. You can offer their services to your
clients if they want powerhouse professionals to
do this work for them or to complete what your
customer couldnt accomplish with this book.

Our association with these organizations will put
money in your pocket! Watch your e-mail in the
upcoming weeks for more details!
- Laura
67





















Know the Terms of your Mortgage

Answer the questions below.
1. How many mortgages do you have on your home?
(You may have one or two, depending on how much money you put
down.)

2. What is the interest rate on your mortgage or mortgages?
Mortgage 1:
Mortgage 2:

3. What is your monthly payment for one or each of your mortgages?
Mortgage 1:
Mortgage 2:

4. Who holds each of your mortgages? (Is it a local institution)?
Mortgage 1: Local?
Mortgage 2: Local?

68




















Know the Terms of your Mortgage

5. Are your taxes escrowed (does your lender include money for your
taxes, each month, in your mortgage payment)?



6. Do you pay Private Mortgage Insurance ? If so, how much do you
pay per month or year?


You are now quite informed on the terms and conditions of your loan. Use
this information when speaking with your lender to determine if you qualify
for a loan modification, to decide if refinancing or a home equity line of
credit may be a solution to your problems, and if you are eligible to drop
your PMI (Private Mortgage Insurance) if you carry it.
69




Private Mortgage Insurance:

PMI: Private Mortgage Insurance is an insurance policy purchased by the home owner
(you) that is provided as a means of protecting the lender (the bank) in case you default on
your loan. One potential benefit of PMI is that it sometimes allows people to purchase
homes with less money down.
However, you will be paying for the insurance policy. Once you have 20% equity in your
home, you longer need to have private mortgage insurance. It is important to note, though,
that it is up to you to cancel your policy. As soon as you have 20% equity in your home,
contact your PMI agent and cancel your policy.
It is of no benefit to you, whatsoever, to continue to keep the policy. Private Mortgage
insurance can cost anywhere from $40-$100 per month. In 1998, the FTC or Federal
Trade Commission enacted a law (The Homeowners Protection Act of 1998) that required
Private Mortgage Insurance to be dropped automatically, after an individual obtained 22%
equity in his or her home.
The law also says that new borrowers must be told about the law at the time of their
closing and once a year, thereafter. It requires lenders to provide a phone number for
borrowers to call, regarding information about cancellation of PMI. If lenders fail to
provide you a phone number or provide assistance, call the Federal Trade Commission
Directly (1-877-FTC-HELP).

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If you have 20% equity in your home you can save
yourself a lot of money by canceling your Private Mortgage
Insurance.
No one will let you know that it is time to cancel your
policy, so it will be up to you to watch for the opportunity
You will know that you have 20% equity when you have
either paid off 20% of the loan, or your home has
appreciated 20% in value from the time youve purchased
it, or the amount of money you have paid on your home,
along with how much it has appreciated, equals 20%.
You can find out if your home has appreciated enough by
checking tax assessments or having your home appraised.
If you have it appraised, it will cost you approximately
$300, but appraisals are usually significantly higher than
assessments, except in really depressed markets.

Once you no longer need PMI, call your insurance agent
and cancel the policy. Your lender is required to provide
you with a number to call to cancel your policy. This is
required as per the FTC Homeowners Protection Act of
1998.
CANCEL PMI
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What is Loan Modification?

Loan modification is when the lender agrees to modify the terms of the loan, and
essentially writes a whole new loan. As an example, the lender may agree to extend the
terms of the loan or lower the interest rate of the loan, temporarily. This option helps you
catch up on unpaid payments by making your monthly payments affordable. Loan
modification may be appropriate if you have recovered from a financial problem and can
afford to make your loan payments after they are adjusted.
In most cases, lenders will not be jumping up and down to modify your loan. It will
definitely be up to you to ADVOCATE FOR YOURSELF. Loan modifications cost
lenders money. It takes them time, and they will never actively seek to offer loan
modification as a solution to your problems. It will be up to you to show your lender why
it is really the best solution for everyone involved, for them to give you a modification to
your loan.
The only way you will probably be able to get a loan modification, however, is if your
bank still owns your loan. A lot of loans today are sold, in bundles, to large corporate
lenders. This may very well be the situation for you if you were a sub-prime borrower (a
borrower who borrowed with questionable credit).
If your bank still has your loan, they can benefit from readjusting the terms of your loan,
because the alternative for them would be that you might possibly be unable to continue
making your payments. It is also to their benefit to modify your loan, because you have
choices. You can seek a new loan somewhere else (this is more the case if you still have
decent credit).
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Talking with Your Lender About Loan Modification

DO be polite and courteous.

Do ask for the name of the person with whom you are speaking.

Do keep a record of the people you talk with, dates, and basic notes of what was discussed
in each conversation.

DONT yell, swear, or otherwise be confrontational.

DO ask for clarification if you dont understand what is being said.

DO repeat back to the representative what you think she or she has said.

DO say, up front, that you are expecting a Loan Modification.

Do ask when you can contact the representative again to find out if you are approved.
73





Do point out the obvious benefits that the bank will receive if they modify your loan (they
will receive your payments, and they will keep you as a customer).

Do tell the representative that you well call to check the progress. This helps hold the
representative and the company accountable, because they likely will not call you, and
they may not be good at following up without your prompting them.












BE PERSISTANT IN ASKING FOR
WHAT YOU WANT!

DALE CARNEGIE:
Most of the important things in the world have been
accomplished by people who have kept on trying when there
seemed to be no hope at all.

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Scary Payday Loans

Payday loans are scary business. They are small, short term loans (usually a week to a
month) with insanely high interest rates. The Annual percentage rates (APRs) on payday
loans range from between 390% and 1000 %. This means that if you borrow $200, you
could pay as much as $780-$2000 in interest on that $200 loan, if it took you a year to pay
it back. Even if you repaid the loan within the month, that same $200 would cost you
between $65 and $ 167.
Are there alternatives to payday loans?
See if you qualify for a high-interest credit card. This is still a better alternative than a
payday loan.
Ask your employer for a payday advance. Some employers will grant this.
Ask creditors for more time to pay your bills without it negatively impacting your credit
score. Even with late fees, this could cost you less than a payday loan.

HELOC: Home Equity Line of Credit or Refinancing Options
Another option this one works if you have a lot of equity in your homeis to refinance
your home or get a home equity line of credit. For either of these options, you will need to
get your home appraised. Once you meet with a lender and you are certain that you will
be going ahead with one of these options, your lender will have you get an appraisal on
73




your property. Either use an appraiser that your lender recommends, or find one in the
phone book. Appraisers give an assessment of your homes current value.
If you refinance your home, you will be pulling money out of your home and getting a new
loan at a new interest rate, for a new term (probably 30 years, since your purpose is to
lower your payments). You can use the money to repay your bills. The drawback to this
is that when you go to sell your home, you will have far less equity than you once did,
because you will have already have pulled a lot of it out. Also refinancing your home will
extend the number of years you will be paying a mortgage.

A Home Equity Line of Credit is a loan that is taken out against your homes equity. This
is simply a secured loan of sorts that you can usually get a fairly good interest rate on. For
people who have a lot of equity in their home, it is a good way to borrow money to pay off
large sums that they owe. You will however, be making monthly payments to repay it. If
you are strapped for cash, anyway, this may not be the solution.
How Do Creditors Collect Money

If you owe money to others, you are not a bad person, you are not a criminal, and no one
should be allowed to make you feel like one. It is not a criminal offense, it is a civil one,
and while it will be stressful, and while creditors may be allowed to follow you and
persistently seek payment until you have fulfilled your obligation, they must be respectful
and remain within the law at all times.
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There are many ways for creditors to legally seek retribution for the money that you owe
them. They may seek judgments in court that allow them to garnish your wages, they may
place liens against your property, and they may be granted permission to seek other
monetary assets (i.e. money from your savings account). If you have borrowed money on
a secured line of credit (money borrowed against an asset such as a home), they may even
begin proceedings to seize your property. What they cannot do, however, is threaten,
harass, or intimidate you.
Liens:
A creditor can attach a lien against your property if you own your own home. This is not
at all like foreclosure, nor will it in any way give the creditor the right to your property.
However, it will give you a muddied title. What this means, is that you will not be able to
sell your home or transfer the title until you have paid your creditor. In addition, you will
likely owe the creditor interest that has accumulated on the lien from the time that she
placed it.
Seizing of assets:
If you owe creditors money and they take you to court and win, they may be allowed
access to assets you have in order to secure what you owe them. This does not mean that
they can take your house or car, for example, unless, of course, your loan is secured with
this asset. What this does mean, however, is that they may be allowed to take payment
from a savings account if, for example, you owe them $1000, and you have a savings
account with $5000 in it. However, since you are reading this book and working to rebuild
your credit, we know that if you have the money to repay your debts, you are also working
to do that, as well.
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Garnishing Wages:
One way that creditors can get money from you is to garnish your wages. If you dont
have any money in a savings account and you dont have any assets, a creditor may seek to
earn a judgment that allows her to draw money from your paycheck on regularly scheduled
intervals.
Cross Collateral:
If you borrow money from a credit union for a loan for a vehicle, for example, they will
use that as collateral for any other money that you owe them (credit card, bounced checks,
other loans, etc). This means, even if you have paid off your vehicle, if you owe them
other money, they can seize your vehicle as collateral for payment of delinquent loans.
Another way this works is if you think you are paying money on your vehicle loan, but
you own money on other loans to the credit union, they can put the money towards any of
the loans that they wish, making you, in fact delinquent on your vehicle loan, making them
able to legally repossess it.



78




Consumer Protection Laws
There are three main laws that you can use to repair and protect your credit. They are the
Fair Debt Collections Act, the Fair Credit Reporting Act and the Fair Credit Billing
Act. If you know your rights and apply them diligently and consistently, and most
importantly, if you stay within the law, you can improve your credit score and stop or
lessen credit harassment.
This is what is important to remember. The credit bureaus are services that are in place to
make money. They are not government agencies or bodies, and they are not protected as
such. You, however, are protected under official laws, and as long as you are providing
true and accurate information, the law is on your side. The Consumer protection laws are
designed to protect you, the consumer. Make sure that you use them to your advantage.
Be lawful, but be picky, and insist that they prove everything. Following is an explanation
of each law, along with many examples of ways you can dispute information on your
credit report, and/or how you can stop harassment.





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Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act was enacted by Congress to protect the privacy
of individuals and to prevent us from any potential or real harassment that may occur from
Credit Collection agencies. This act protects debtors by regulating what debt collectors
and collection attorneys can do. You can request that debt collectors and/or debt attorneys
stop calling you at home and at work, and they must stop, once you ask them to stop. The
request must be in writing, and it must be sent by certified mail. IT DOES NOT
REGULATE THE ACTIONS OF THE ORIGINAL CREDITOR.
This means, if you owe money to a jewelry store, the jewelry store can call you as many
times as it wants, but if the jewelry store turns you over to a collection agency, you are
now protected by the Fair Debt Collection Practice Act.
When you owe a creditor money, there is little he can do if you are unwilling or unable to
pay. Of course, if you are reading this book you are obviously a person who wants to pay
off your debts.





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If you are unable to work out a payment plan with a creditor, he may turn you over to a
collection agency so that he is relieved of trying to collect on the debt that is owed. If
this is all that the creditor does, there is little that the collection agency can do to secure the
money that you owe.
Most often, collection agencies will not accept partial payments. They have been hired to
get full payments, and that is what they intend to do. However, this is silly, because those
of us who owe money in the first place, are unable to pay in full, anyway. It would likely
be in everyones best interest for the collection companies to simply accept the partial
payments.

When people make partial payments to debt collection agencies, more often than not, they
are mailed back or not accepted. But.if you keep sending in partial payments, making
good-faith attempts to pay down your debts, when and if you do get taken to court, this
will be recognized in court as your good faith effort, and as a silly game that your creditor
is playing.





Report Harassment to the Better Business Bureau!

81





Credit Collection Agencies

If you are severely delinquent in your bills, one way
that companies will get you to pay is by turning your
account over to credit collection agencies. For a flat fee
or for a percentage of what they collect, credit
collection agencies provide a service for companies in
which they work to collect debt owed by different
individuals.
Credit Collection agencies are good at being annoying.
Thats their job. And, of course, the best way to make
them go away is to pay your debt. But you would have
done that already if you could.





Debt collection agencies
are not allowed to take
your house, garnish your
wages, or take money
from you in any other
way, unless there has
been a legal proceeding
that allows the original
creditor to do so.
People in debt often feel
so guilty that they will put
up with more than they
have to, but no one can
treat you poorly unless
you let them.
Debt collectors can not
threaten to call your
employer, they cannot
call you at work or home
once you have sent them
a certified letter asking
them not to, they can not
threaten to take away
property or assets,
unless such judgments
have already been
issued. You are
obviously doing your
best to repay your debt.
Know the law and use it
to your benefit.

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Stop Collection Agency Harassment

Know your rights.
1. Can Credit Collection Agencies contact others to find out where you are?
YES.
Avoid this by letting them know where you are and being proactive in contacting them.
Let them know your plan for payment.
2. Can Credit Collection Agencies contact you any time of the day or night?
NO.
Collection agencies can only contact you between the hours of 8A.M. and 9P.M.
3. Can Credit Collection Agencies intimidate you or threaten you in any way?
NO.
Collection agencies are not allowed to threaten or intimidate you. They must be
professional and accurate. If they are threatening or intimidating, you should contact the
Better Business Bureau and report them.
83





Stop the Phone Calls
Send a certified letter to the credit collection agency. You can
send a certified letter by taking it to the post office and asking
that it be sent as a certified letter. This means that when it is
received, it will be signed for, as proof that it was, in fact mailed,
and delivered.

In your letter, request that they stop calling you at home and at
work.

Request a return receipt to ensure that the letter was received.
You also do this when you mail the letter at the post office.

If you follow these steps, and they dont stop calling you, report
them to the Better Business Bureau

Remember you can only do this with collection agencies and
debt attorneys; you cant do it with the original creditor.

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LETTER TO STOP COLLECTIONS AGENCY FROM CALLING
Date
Company Name
Company Address
City, State Zip
RE: Account 1234567890
Dear Sir or Madam:
I request that you CEASE and DESIST all phone collection efforts on this account
(Information Enclosed). The Fair Debt Collections Act grants me the right to deal only
with my original creditor. Therefore, I am requesting that you CEASE and DESIST all
phone contact with me from now on.
You are hereby instructed to cease verbal collection efforts immediately or face legal
action under the Fair Debt Collections Act and other applicable state and federal laws. I
am sending this letter via certified mail because this is of utmost importance to me. Please
provide me evidence of receipt of this letter and acknowledge to me, in writing, that you
will CEASE and DESIST.
YOUR PROMPT ATTENTION TO THE MATTER IS NECESSARY.
Sincerely,
Your Name

MAKE SURE YOU SEND ALL LETTERS VIA CERTIFIED MAIL!
83






















FAIR CREDIT BILLING ACT

States that all information included on bills sent by
creditors must be 100 % accurate for the bills to be
considered legitimate. If the information is not 100%
accurate, your payments do not need to be sent until a
new bill is created with the correct information. Any late
charges assessed to you on bills that had incorrect
information can be contested.
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Fair Credit Billing Act
The Fair Credit Billing Act requires creditors to be 100% accurate and 100% complete in
their billing. They are not allowed to include unauthorized charges, incorrect dates,
incorrect amounts, charge you for goods or services that you did not accepts or that were
not delivered, items that were sent to the wrong address, bills sent to the wrong address (if
you sent a change of address form in writing 20 days prior to billing period), and they are
not allowed to bill you for things for which you asked for clarification (without providing
you with the requested clarification).
This means, if you have a delinquency noted on your credit report, but you can find proof
that you were late in paying that bill because of a billing issue, with the correct
documentation and a well-written letter, the credit bureaus should take this item off of
your report.
The following is a sample letter that you are free to reproduce. Use it to challenge late
payments that appear on your credit report that you can dispute because of inaccurate
billing.






87




LETTER TO DISPUTE BILLING INFORMATION
Date
Company Name
Company Address
City, State Zip
RE: Account 1234567890
Dear Sir or Madam:
I am writing to request that you remove the late payment information regarding a bill sent
to me from McKormik Grain and Feed.
This bill was late being paid because the creditor had an error on the bill, causing some
confusion. The creditor (McKromik) entered July 21 as the date of service, while the
service was actually performed on July 30
th
. I have since paid the bill in full, but under
the Fair Credit Billing Act, I am requesting that any record of delinquency immediately be
dropped from my report. (I have enclosed a copy of my paid receipt to expedite the
process).
I am sending this letter via certified mail because this is of utmost importance to me.
Please provide me evidence of receipt of this letter and acknowledge to me, in writing that
you have removed this item from my report.
YOUR PROMPT ATTENTION TO THE MATTER IS NECESSARY.
Sincerely,
Your Name
88

FAIR CREDIT REPORTING ACT

Because of the Fair Credit Reporting Act, Creditors Cannot use
WHOYOU ARE to Discriminate Against you.

Because of the Fair Credit Reporting Act, Creditors have Laws
against how long negative credit can stay on your Credit
Report.

Because of the Fair Credit Reporting Act, creditors must have
permissible purpose to check your report.

Because of the Fair Credit Reporting Act, the Credit Bureaus
must handle consumer complaints within 30 days.

(Note, however, that having a Credit Bureau address your
concern, is certainly not always enough).

89




Fair Credit Reporting Act

Before the Fair Credit Reporting Act was enacted, consumers were not allowed access to
their credit reports, and consumers race and other demographic information was allowed
to be included on their reports. Since the act was passed in 1970, however, this has
changed. What has not changed, however, is how few people actually take advantage of
the rights that this law extends to us. TAKE ADVANTAGE OF THIS LAW. LET IT
WORK FOR YOU! The Fair Credit Reporting Act
Allows you to get your credit report once a year for free and at a reasonable price
thereafter.
Places several restrictions on who can check your report (legitimate businesses need to
have good reason to run your report).
Clarifies how long information can stay on your report, giving maximum limits for such
information.
Specifies how your complaints must be handled by the credit bureaus. (Puts governing
laws on the bureaus and holds them accountable).




90




Challenging an Unauthorized Inquiry on your Credit Report
Every time someone checks your credit, a landlord, a vendor, etc.it is noted on your
credit report. However, the Fair Credit Reporting Act only allows authorized inquiries to
appear on your credit report. This means, if you see inquiries on your report that you
know you have not given permission for, you should challenge them. Ive included a
sample letter for this specific purpose. You may use any or all parts of this letter, as you
wish.

Write your Creditor a Letter

Creditors have the right to remove items from your credit report. If you have an item that
is causing you poor credit and you feel that you have a fairly legitimate reason for having
had that outstanding debt, you may be able to have a creditor grant you his or her
forgiveness and remove that item from your credit report. It is definitely worth a shot.
Below is a sample letter. You are free to reproduce part or all of it as youd like. Again, it
is important to be completely truthful and not dispute accurate items in your report.


91




LETTER FOR UNAUTHORIZED CREDIT INQUIRY
Date

Company Name
Company Address
City, State Zip


Re: Unauthorized Credit Inquiry


Dear Kay Jewelers,

I recently received a copy of my TransUnion credit report. The credit report showed a
credit inquiry by your company that I do not recall authorizing. Under the Fair Credit
Reporting Act, it is not permissible for you to put an inquiry on my file unless I have
authorized it. Please have this inquiry removed from my credit file, because it is
negatively affecting my credit report.

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I have sent this letter certified mail because I need your prompt response to this issue.
Please notify me with documentation that you have had the unauthorized inquiry removed.

If I am writing this letter in error and you believe that you did have my authorization to
check my credit, please send me proof of this.

Thank you in advance,


Your Name
93




LETTER TO CREDITOR TO ASK FOR REMOVAL OF ACCURATE ITEM
Date
Company name
Address
Re: Acct # XXXX-XXXX-XXXX-XXXX
Dear Credit Card CEO name
I am writing to you today regarding my credit card account #41234-XXXX-XXXX-
XXXX which I had while I was traveling abroad with my family. I am writing to ask if
you would consider making "goodwill" adjustment regarding the reporting of my
delinquencies to the three credit agencies.

Your company provided me with excellent services. However, I regret that I was a less
than perfect customer, and I take full responsibility for having let my account balance
remain unpaid over the past year. I lost track of my account and became aware of it again
when I received a copy of my credit report this past month, at which point I promptly paid
my balance.
I take full responsibility for the delinquent payments, and I am not attempting to justify my
actions. However, I would be extremely grateful if you would consider the sincerity of my
apology and my prompt repayment once I became aware of my unpaid balance and
consider removing the notation from my three credit report.
I am not disputing that this information is accurate, but simply requesting a gesture of
goodwill. According to the Fair Credit Reporting Act, it is NOT IMPARATIVE THAT
94




ALL ACCOUNTS BE REPORTED (only that those reports that are reported are accurate-
which again, I am not disputing). Therefore, as it is within your discretionary rights to do
so, I would be so very grateful if you would remove this item from my credit report with
each of the three bureaus. Your kind consideration in this matter is greatly appreciated.
Sincerely,
Your Name



Removing Old Information from your Credit Report
Positive information stays on your credit bureau reports indefinitely. Although
information about an account comes off after about seven years if no new
information is added.

Negative information, such as late or inconsistent credit payments, will stay on your credit
report for at least seven years, as does public record information such as tax liens and
delinquent child support payments.
Bankruptcies, foreclosures, and judgments can stay on your credit report for up to ten
years, and information regarding a criminal conviction has no time limit. Most inquiries
stay on a credit report for up to two years. If something has been on your report for longer
93




than it should, challenge it. Ive included a sample letter for this specific purpose. You
may use any or all parts of this letter, as you wish.
96




LETTER FOR REMOVING OLD INFORMATION FROM REPORT

Date

Company Name
Company Address
City, State Zip
Dear Sir or Madam,

In reviewing my report, I noticed that there is information on my report dating back more
than ten years. I am insisting that the following information be removed under the Fair
Credit Reporting Act.
Bankruptcy (dated Jan. 12, 1993).
Foreclosure (dated Oct. 18, 1995).
YOUR PROMPT ATTENTION TO THE MATTER IS IMPARATIVE.
I have sent this letter certified mail because I need your prompt response to this issue.
Please notify me with documentation that you have had the unauthorized inquiry removed.

Sincerely,
Your Name
97




Credit Repair Companies

With the help of this book, you should be able to repair your credit on your own. If you
are still interested in looking for the assistance of a credit repair company, Beware.
If a service requests fees in advance of any services, setups, or face to face meetings, this
is more than suspect. Reputable services should establish their credibility before charging
you a single penny.
Require any service that you hire to inform you of your rights and to disclose them to you,
in full. Any company or service that you hire should educate you, as well as work with
you.
Beware of services that advertise to repair your credit by creating a new identity for you.
This is illegal and dangerous.
Make sure that credit repair services have the expertise that they claim they have.
Wording is a powerful tool.
Watch out for companies that claim that the Federal Trade Commission endorses them.
The FTC only serves to nab bad companies. It does not endorse reputable companies.


98




New Credit
Opening New Credit After Financial Hardship

There are places to turn to begin to rebuild your credit. Orchard bank, for example, offers
secured and unsecured credit cards, for individuals, even if they have really bad credit.
However, all that glitters is not gold. There are benefits and drawbacks to opening one of
these cards. Use the following information to make the decision that is right for you.
Should you open a credit card to help rebuild your credit? It is probably not a bad idea.
Just be aware, there are costs associated with the process.

What is a Secured Credit Card?
A secured credit card is a card is not much different than a debit card. On the surface,
however, it looks just like a regular credit card, and only you and the bank will know that
it is a secured card. In most cases, because it is a card for individuals with poor credit, it
will have a fairly high interest rate, and an annual fee. This fee will come out of the
money that you put into your initial deposit to secure your card.
Heres how it works: An initial security deposit of $200 is required. Before you may
begin charging on the card, however, you also need to pay your annual fee which ranges
from anywhere between $39-$79, depending on your credit qualifications. Once you have
fulfilled the requirements, you may begin charging. You receive monthly bills, then, just
99




as you would, with a regular credit card. Your $200 stays in your savings account. If you
make your monthly payments, you will begin to rebuild your credit, and you can also earn
a small amount of interest on your $200.
You are allowed to build a credit limit of up to $15,000, in $100 increments. But
remember, this credit card is 100 % secured. This means that if you want to have a credit
limit of $500, you need to have $500 in your savings account. If you want to have a credit
limit of $10,000, your savings account must match, and so on.
The benefit to having a higher credit limit is that you can have more available credit that
you dont use. Remember, from earlier, this looks great to future creditors. If you have a
record that shows you have a habit of using 30-60% of your available credit and you pay it
off regularly, this will boost your credit score and show lenders that you are good at
managing your money and that you make wise financial decisions.





What is an Unsecured Credit Card?
Even with bad credit, you may be able to get an unsecured credit card, if you go to the
right source. Orchard Bank is well known for offering low limit credit cards to individuals
with poor credit. Just like most other companies, their poor-credit series offers cards
Debit Cards Do NOT Build Credit. Period!
100




ranging from Platinum on down. There are annual fees involved, ranging from $39-$59 for
the Platinum card, with $98 in fees being assessed for the Silver card. However, you can
possibly get up to $1000 worth of credit on an Orchard Bank Unsecured Credit card, and it
is a great way to begin rebuilding your credit. Go to their website to check out the
application process or to contact a customer service representative with questions.




101




According to
Equifaxs online
question and answer
page, identity theft
occurs nationwide, but
it is most prevalent in
California, New York,
New Jersey,
Connecticut,
Pennsylvania, Ohio,
Florida, Georgia,
Texas, Illinois, and
Washington.
Identity Theft

Identity Theft

Identity theft is when someone steals your personal
information in order to get access to your credit and bank
accounts, open new accounts in your name, get jobs, a
drivers license, admittance to a place, or even a country,
or commit any number of crimes in your name.

If you are the victim of identity of identity theft, it can turn
into an absolute nightmare. The worst part of this crime is
that you probably wont realize that it has happened or that
it is happening until it is way too late.
Before the victim even knows that her identity has been
stolen, an identity thief can wreak complete havoc on your
identity in the following ways.
PROTECT YOUR WELL EARNED CREDIT!
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Protecting Yourself from Identity Theft Before it Happens

There are some definite steps you can take to protect yourself against identity theft.
Never give out your personal information by phone, mail, or on the internet, unless you
are the one who has initiated the contact and unless you completely understand and are
comfortable with the reason you are giving out the information.

Avoid entering any sort of personal information into public, shared, or work computers.
Sometimes computers retain information on their own. There are also software programs
that allow thieves to retrace what you have entered into the computer. This is a
surprisingly easy way for them to get all of your information.

Dont carry personal information such as your SSN or PIN on you. Dont keep passwords
next to your computer or in your wallet. Memorize these numbers. Make it hard for
identity thieves to find your personal information and put it together by keeping it in a
secure place, not on your person.

Pay attention to what is and isnt in your wallet. Know which credit cards you carry, and
make sure they are in your wallet at all times. This is much easier to do if you only have
one or two, and this is also better for your credit. As soon as you get a credit card, it is a
great idea to write Check ID on the back spot where it asks for your signature. This will
103




require clerks at stores to check the ID of whoever is using the card. If it is not you, they
will have a much better chance of knowing it than if they just needed to check the
signature.

Keep tabs when shopping. When you are shopping and you hand a clerk your credit card,
make sure you get it back. It is an easy oversight to forget it at the register. Make sure
you take your receipt and put it in a safe place.

Keep an eye on your mail. Dont let mail pile up in your mailbox when you are out of
town. Ask a trusted neighbor or friend to collect it for you. Identity thieves can find your
personal information by going through your mail. If you are going to be gone for an
extended period of time, you can also request that your mail be held. You can do this by
calling the U. S. Postal Service at 1-800-275-8777. You can also do this online.
On the same token, dispose of your junk mail and other mail properly. Identity thieves
will go through your mail to find information about you.
Heres an example. Sometimes credit cards will send you information telling you that you
are pre-approved. If an identity thief steals this piece of mail, he or she can go through the
process of applying for credit in your name. If he or she also changes your address at the
post office, he could very well get a card in your name and begin to ruin your credit.


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Keep and eye on what is or isnt in your mailbox. If you ordered a credit card and it
should have come but hasnt, follow up with the company. Know when you get your
mortgage statements, credit card statements, and other bills. If one should have arrived but
didnt, this could be a problem. Follow up on this, as well by calling the company that
was supposed to have sent the bill and asking if it was sent. If it was a credit card
company and the bill was indeed sent, cancel your credit card and get a new one from
them.



Did you know..
Some people feel so overwhelmed with their
poor credit; their piles of bills and debt, and
their financial problems that they seek to
become the victim of identity theft!

This is a very bad idea! Remember, identity
theft is not only used to steal an individuals
financial identity, but your identity can also be
used to commit crimes.

Protect your identity.

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Identity Thieves Can

Open a new credit card in your name
(All they need is your name, date of birth, and SSN).
Sign up for Services in your name (cell phone,
utilities, television, cable, etc)
Open bank accounts in your name and writing bad
checks, thus negatively affecting your credit report
Taking out loans in your name, defaulting on your
loan, negatively affecting your credit
Getting a Drivers License in your Name (this is
often done to allow illegal immigrants to establish
identities and apply for jobs)
Commit crimes under your identity
Pretty much do whatever bad things you can
imagine and more!
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Remember, your relationship with credit and money is not unlike a relationship with
another human being. It is not a static or fixed thing. It is something that you can
constantly strive to improve upon and work at. Once you rebuild your credit, you need to
value the hard work youve done, and you need to protect it and cherish it. Be proud of
yourself, and realize that having that when you make financial decisions and sacrifices that
positively affect your financial future, you are making a decision and a commitment to a
way of life.
Resources
The first and best resource for you to get more information and support is from the person
you purchased this book from. They are part of a national network of Specialists who are
either professionals in financial issues, including real estate situations of all kinds, or are
connected to the very best professionals who can help you! You will find their
information on the back of this book.

Heres to your fresh start!
- 1uu)u 5rhu:!) 1uu)u 5rhu:!) 1uu)u 5rhu:!) 1uu)u 5rhu:!), Author
Founder, Home Redemption Institute
Contact each of the Four Credit Bureaus Fraud
Departments if you fear that you may be the victim of
Identity Theft!
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