PSYCHDOC'S CREDIT REPAIR SCHOOL FOR BEGINNERS by Randy Padawer (PsychDoc)...

CREDIT 101: The Ethics of Credit Repair, 9/8/2005 CREDIT 102: A Consumer Law Overview, 9/22/2005 CREDIT 103: Credit Reports & Credit Scores, 10/6/2005 CREDIT 104: Triaging Your Reports, 10/20, 2005 CREDIT 105: FCRA Street Fighting, 11/3/2005 CREDIT 106: FCBA Street Fighting, 11/17/2005 CREDIT 107: FDCPA Street Fighting, 12/1/2005 CREDIT 108: Small Claims Lawsuits, 12/15/2005

LESSON ONE TRANSCRIPT CREDIT 101: The Ethics of Credit Repair, 9/8/2005 First, when we talk about credit repair we're talking about a number of things really. Is credit repair about making your credit report more accurate? Is credit repair about "fixing" your credit report? What's credit repair? Is credit repair about getting better rates on loans? Getting credit cards? Buying a car? Is credit repair about debt negotiation? Debt reduction? Debt elimination? Learning tricks to improve your credit score? When you talk about getting your life back in order, I'm guessing that (like me at one time) bad credit has caused some heartache for you!? I remember when I couldn't buy a car... We'll touch on all of these during the next few weeks, but the emphasis will be upon removing negatives from your credit report. When negatives peel away, your credit score typically improves. And when that happens, you'll get better rates on loans. Moreover, as a happy consequence of confronting what's on your credit report, you may find that alleged (I'll explain that adjective in Lesson 7) creditors may forgive alleged debts. But debt forgiveness is a possible symptom. My emphasis is about your credit reports. Everyone has to define their own emphasis though. I've done some writing and seminar facilitation for The Motley Fool (Fool.com), and I got into a bit of trouble as a result of that involvement one fine autumn day a couple of years ago. Equifax was (and maybe continues to be) an advertiser with their website, and they didn't much like it when I wrote stuff like this... to quote... "There are a few hardball tactics which you can use with the bureaus and creditors that will compel them to remove negative tradelines, irrespective of accuracy, from your credit reports." Basically, Equifax contended that I was breaking the law when I made that statement, and my Foolish colleagues agreed. So we watered down my statements a bit. We gave in. We caved. We sold out. QUESTION for discussion... Does anybody know how my statements may have constituted lawbreaking? anybody know why Equifax thought I'd broken the law? all of us who tell another human being is defined as a CRO by federal law... crazy huh Section 404 ("Prohibited Practices") of the Credit Repair Organizations Act (CROA) reads, "No person may..."Now before I say another word, note that

CROA doesn't say, "No credit repair organization may..." or even "No organization may..." Rather it says, "No person may..." and continues "make any statement, or counsel or advise any consumer to make any statement, which is untrue or misleading... with respect to any consumer's credit worthiness, credit standing, or credit capacity to... any [credit bureau]... or any creditor." it almost seems to violate the First Amendment! Nobody's ever challenged that incourt. I think it would fall flat. But... As I sit here tonight I am a CRO of one person. Equifax basically said that the phrase "irrespective of accuracy" meant that I was advising people to disregard the truth when making statements about themselves, that this violated federal law, and that if I didn't revise my tune they might not be interested in advertising with The Motley Fool anymore. Guess what? Equifax was wrong. There ARE some things which may compel a credit bureau or creditor to remove items from a credit report IRRESPECTIVE OF ACCURACY... and YOU DON'T HAVE TO TELL LIES in order for that to happen. In fact, let me say it more plainly...I call these PSYCHDOC'S FIVE BASIC CREDIT REPAIR PRINCIPLES... 1) You should always TELL THE TRUTH when communicating with credit bureaus and those companies which report to them. 2) Telling the truth is usually more INTIMIDATING to those entities. 3) Telling the truth is almost always more EFFECTIVE vis-a-vis your goals. 4) Credit repair involves INTERVENTIONS which invoke one of three TRUTHFUL communication tactics: a) polite requests, b} requests for information, and c) legal demands. and the last one... 5) Credit repair involves leveraging your FEDERAL CIVIL RIGHTS in the service of improving your credit rating. Another quick definition... I use the word INTERVENTION a lot. Basically a credit repair intervention is anything you do to intervene against the current credit status quo. Interventions include credit bureau disputes, goodwill requests, escalated information requests (which include creditor-directed communications like the "Nutcase" series and other effective tactics), formal requests for validation, and more. Such interventions usually take the form of things like hard-

copy letters [best], internet-based communications [sometimes ok, depending], phone calls [iffy], smoke signals [forget it], etc. I've been asked... Well, gee whiz, how can one dispute a negative that is accurate with a credit bureau without telling a lie? As an aside right now, though, does anybody have any ideas how one can dispute an accurate negative listing without lying? Discussion question...we'll definitely have a hard copy discussion ... how can one dispute an accurate negative without lying? any old-timers care to chime in? well... smile.gif well, what if it's yours? What if something is yours on your report, and it is reported as late because it was truly late...We'll explore ETHICAL DISPUTING examples more fully in the fifth lesson (CREDIT 105: FCRA Street Fighting) For now, consider this: In the case of credit bureau disputes, it's the difference between saying, "The Sears tradeline (account 12345) is not mine" versus "Provide documentation that the Sears tradeline (account 12345) belongs on my credit report and that my rights have not been abrogated. Otherwise please delete this damaging data." When you say, "It's not mine" (and it's yours), you're treading some really rough territory. The bureaus don't want to get a letter from somebody who knows their rights and who can spell out what it is they need to do. Now, many people have achieved great results saying, "not mine. The problem comes later... if indeed you wanted to take the bureau to court. You want your documentation with them to be 100% honest and on the mark. I sued all three CRAs in small claims court a few years ago. It wasn't as tough as that sounds, ha. But that's not where this lesson is heading. We'll talk about small claims in Lesson 8. Will provide some letters, templates, etc. With inquiries... I would say "Please show documentation that the creditor gave evidence of their permissible purpose when requesting access to my report. Otherwise you are bound by federal law to remove this inquiry now. I have ALWAYS contended that truthful words are more intimidating than a simple lie. The CRAs read lies all the time. But a carefully written letter that reveals the writer to be educated to their rights...is far worse for them potentially. The same logic applies to creditors as with CRAs. You're presenting yourself as someone I like to term "a litigious nutcase"... but you're not shouting...you're not being

impolite... you're not making accusations... and you're not telling lies. In fact... The truth is in the asking If you look back over this transcript in the chat window to where I talked about the types of interventions (my fourth basic law...) 4) Credit repair involves INTERVENTIONS which invoke one of three TRUTHFUL communication tactics: a) polite requests, b} requests for information, and c) legal demands. Polite requests may be goodwill requests... Or it may just be you begging Lowe's credit to remove that 30 day late from 3 years ago (which they may do). b} "requests for information" ... those types of interventions include original creditor "validation" (so-called... we'll open that bag of worms in Lesson 7 oops... Lesson 6 or debt validation (Lesson 7) where basically you're asking the CRA (in the case of the HONEST AND ETHICAL dispute I mentioned before) or the creditor for more information that they simply don't want to take the time to provide necessariliy. They don't know where you're coming from, and that's better. When you say, "This wasn't mine" and they basically know different, the line is drawn in the sand. When you say, "Pursuant to my rights under the Fair Credit Billing Act, please provide documentation regarding every transaction ever associated with this account." Then their heads spin (you hope,and they often do, lol) Much more powerful. Some creditors in that situation-- especially if the stakes are low -- will simply delete the negs rather than fool with it. That's the desired outcome for FDCPA validation... and for FCBA escalated information requests... and for CRA disputes as well CRAs don't provide account information like that but they are compelled to provide the information that federal law spells out in the FDCPA in the FCRA. FCRA compels credit bureaus. FCBA compels original creditors. FDCPA compels third party collectors. That's a very over-simplified way to "map" it out in your mind. I used to teach child psych at the University of Tennessee, and I was famous for repeating myself... ha but I want to repeat one thing that was a cut and paste from earlier...with respect to CRAs. In the case of credit bureau disputes, it's the difference between saying, "The Sears tradeline (account 12345) is not mine" versus "Provide documentation that the Sears tradeline (account 12345) belongs on my credit report and that my rights have not been abrogated. Otherwise

please delete this damaging data. "As you read the statute... and interact with others on Creditboards... and become more familiar with the law and become more comfortable with the material... You'll find yourself creating variations on those kinds of interventions, and you'll likely share them with others! Then, a few years later, you'll lead a class like this, LOL. (If you still find the material interesting, ha.) In other words... that sample CRA dispute I just provided... "Provide documentation that the Sears tradeline (account 12345) belongs on my credit report and that my rights have not been abrogated. Otherwise please delete this damaging data."would probably get OLD fast...think of your own words but the point is the same ask them to prove it and don't you lie To risk moving away from psychology and entering the realm of the preacher... I just never understood those consumer advocates who believed that they needed to advise others to tell lies. The CROA notwithstanding... lies just don't work as well. You could send them separate... you could group a couple together, etc. "Demonstrate that this material appears correctly on my reports. Request ample documentation from these two alleged creditors." "If these items appear in error, I have a cause for action because my rights may have been abrogated in that case." See what you can do, ha?! Now, in real life... those words will have the same impact as a "not mine" -- except more powerful because they don't know where you're going next (EVEN THOUGH YOU DIDN'T THREATEN A LAWSUIT EITHER) brevity is good Ok... So this brings us to the next item on tonight's syllabus What are your credit repair goals? We did cover this a bit at the beginning... It's helpful in credit repair...as with just about any worthwhile endeavor in life...to know your goals before you embark. I think it was Missbee who said she wanted a house you just have to know what you want fantastic. Once you know...You'll be more focused. It's hard for me to get away from my background in psychology... Finally, the last portion of tonight's syllabus... A note about attitude. In this regard, a few suggestions have worked for me... 1) Be serious. 2) Learn about the various laws discussed on Creditboards... and I'll interject from my prepared notes...those laws include... minimally...

FCRA FCBA FDCPA and even the Truth in Lending Act (which is a superset of the FCBA and a few other civil rights) HIPPA those are the ones you should get to know if you can if reading law outright bores ya... (I love it but I'm weird) then there's a wonderful other way to get it READ THE BOARDS these people make it so interesting "search" is good oops... getting back to my suggestions 3) Embrace your community. (In this case, embrace your friends on Creditboards.com. They're your best allies.) 4) Retain all written correspondence, credit reports, and any other written materials. 5) Make notes as if you're headed to court, even though you probably aren't. Such documentation will likely become very helpful during your journey. 6) Don't scream, yell, threaten, or make an ass of yourself. Those six things will keep you in good stead. (Ah yes, that, Blue) one bit of controversy...I was browsing the internet last week and listened to some recorded phone calls between a credit consultant and a few alleged creditors. I'm not going to tell you whose calls these were, because I have much respect for this particular person (even when some others sometimes don't). I've learned much from this individual. Regardless, I disagreed with the consultant's attitude... In every case, the phone call descended into a crescendo of conflict. The consultant was SCREAMING AND YELLING..."IF YOU DON'T PROVIDE VALIDATION, THEN I WON'T PAYYYYYYYYYYYYYYYY!" the consultant wailed. "DON'T YOU UNDERSTAND, YOU IDIOT!!!!!???????????" And on and on and ON AND ON AND ON. This ultimately gets you nothing that couldn't have been achieved without risking an aneurysm. Similarly, threatening letters can be shelved in favor of ones which -- through ethical but escalated requests for information to which you are entitled -- simply irritate the other party into

submission. I once wrote an essay on another discussion board which included this suggestion: "Don't be a sonofabitch." I'd like to quote myself here... "Some people think that embracing a litigious mindset requires acting like a sonofabitch. (Can we say that on this board, lol?) Nothing is farther from the truth. Whatever you do, DON'T act like a sonofabitch. Here's why." "Sonofabitches aren't satisfied with the tradeline deletion. Sonofabitches REQUIRE the tradeline deletion AND a monetary award of $10,000 AND a formal apology AND admission of wrongdoing AND a brand new credit card AND self-mutilation, etc. You don't want your adversary to believe that you are a "crank" who could NEVER be satisfied." "Instead, you want your demands to be VERY clear right from the start -- whatever those demands are. And you should state those demands politely. Potential consequences should be stated politely as well." "Picture the stance most often drawn by lawyers in a courtroom. They are matter-of-fact to a deadly degree. They don't beg. They don't threaten. They don't scream at adversaries unless they want to be admonished by the judge. They simply state their case, as strongly and as seriously as possible.

END CREDIT 101

LESSON TWO TRANSCRIPT CREDIT 102: A Consumer Law Overview, 9/22/2005 PSYCHDOC'S CREDIT REPAIR SCHOOL FOR BEGINNERS

For those who have just joined us, I should mention that the 8 lessons are divided into two sections...the first three lessons (where credit repair is framed as an ETHICAL enterprise in opposition to the many UNETHICAL business practices which comprise the consumer credit industry)...and the last five sessions (where we discuss the nitty-gritty of credit repair -- interventions which leverage your RIGHTS as a citizen). Like last session, I hope we'll all learn something new, but I especially hope that those who are new to their credit repair campaigns come away from these sessions with something that will contribute to their eventual success. Tonight's syllabus... -1-- Course overview and format (which we've already done) -2-- Brief review of the last session -3-- "Three Musts" for beginners -4-- The laws we reference -5-- How to invent credit repair interventions

Basically... the first message... Credit repair involves INTERVENTIONS which invoke one of three TRUTHFUL communication tactics: a) polite requests, b} requests for information, and c) legal demands. dubzero... just a quick note for those who weren't here before being polite doesn't necessarily mean being solicitous or kissing someone's behind essentially it means that a calm legal-based approach can be far more effective than a bunch of screaming and yelling someone who calmly demands that the other party comply with federal law is going to be far more of a threat than someone who thinks they're going to get great results by trying to intimidate the other side very true, dub and rich. Well, enough about last session... there is a transcript for those newcomers here who would like to review that. That transcript

can be found on the main credit repair board attached to a sticky message at the top. Since this is primarily a course for beginners, and since it's likely that many other beginners will read these transcripts later, I want to mention my "Three Musts" for beginners. 1. You must be willing to learn. Actually, this is really about attitude. I once spent an awful lot of time in another credit-related community preaching the virtues of "BE WILLING TO BE A NEWBIE FOR AWHILE BEFORE PROCLAIMING YOUR EXPERTISE." What I was trying to do with that is help people to understand that they would indeed be accepted even if they didn't know anything at all. I had seen plenty of newcomers, time and again, either not post because they thought they didn't know enough to participate. Or they didn't post because they were afraid that someone would think they're stupid. Or, worse, they would try to present themselves as knowing more than they actually did know because they thought that was the clear path to acceptance. (I think that irritates everybody the most, lol.) The truth is far better than some newcomers might expect. Creditboards.com is frequented by a whole bunch of folks who want nothing more than to help somebody get through what they once got through. For that reason, you simply must feel free to identify yourself as somebody who's seeking help! And, for goodness sakes, feel free to do it without apology. Just get in there and say, "Hey, I'm new here, this is my situation, and I want to learn and would appreciate anybody's help." The Creditboards swimming pool is warm. 2. You must participate. You've not only got to be willing to learn, you've got to participate. Some people introduce themselves, and then wait for the ambulance to come to take them away to the Credit Repair Emergency Room where the experts will do all their work for them. Then when it doesn't happen, we never from them again. Creditboards isn't an emergency room. Rather, it's a community, so after you introduce yourself and state your problem, you may not get an instant answer. Rest assured, though, people are already getting to know you, and they may well be thinking about what you've posted. After that, you've got to "keep coming back" as I once heard elsewhere, continue interacting, and always ask more questions. Staying with the community and participating fully is

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the key to your ultimate success. Over the long haul, you'll probably find you're answering more questions than you're asking. But even when others think you're an old grizzled expert, you should still feel free to ask even basic questions. Even the old-timers are still learning. 3. You must read more than this. Homework is not fun. But you've got to do it if you don't want to fail. Now, I'm not necessarily suggesting that you venture onto the Internet right now and find the laws we'll mention tonight and read them fully. (Of course that wouldn't be a bad idea, frankly, and many of the most successful among us have done just that.). On the other hand, get ready to at least READ ABOUT them. One way to do that is to spend at least an hour a day reading Creditboards.com for one full week. Just get in there, and start reading. You'll definitely come across stuff that makes no sense to you at all, but keep reading anyway. If you do that for a significant amount of time, the material will begin to congeal, and you will find yourself understanding more and more. Make a commitment to yourself to read the daylights out of this board for a brief period of time before you do anything else. Consider it your Master's Degree in Credit Repair. Just as a bit of discussion Who here has actually read the FCRA? wow lots of yeses, ok, who's read the FCBA (if you don't know what that is, I'll detail that in a minute) FDCPA? FDCPA is one I would encourage you to read. well, they're tough to read but if you can't make yourself read 'em as I said at least read ABOUT them as much as you can on the board here are a few links FCRA: http://www.ftc.gov/os/statutes/fcra.htm FDCPA: http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm FCBA: http://www.ftc.gov/os/statutes/fcb/fcb.pdf That's a pdf file (Adobe Acrobat) I would encourage you to at least look over them look at the subsection titles and dip in it will help as we move forward through the course. For those who are interested in HIPAA (more later) regarding medical accounts Here's a great link http://www.hipaacomply.com/ Very good stuff. Now, while we begin to talk about the legal basis for all of this it's bears mentioning for a moment that there are other tactics. I'm keeping in mind that there will be newcomers reading the transcript of this in the future so... You

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may have come across credit repair methods which are strictly illegal. These range from booklets and consultants who will advise you to do everything from identifying someone near your age who died as a child and attempting to establish credit in their name, to simply making up a Social Security number in accordance with some geographically-based insider information regarding the numbering scheme, to acquiring an IRS Taxpayer Information Number (TIN), which looks like a Social Security Number, and establishing credit with that, to you-name-it. Needless to say, all such methods risk loss of freedom, income, and community standing. Anytime you see an advertisement for "NEW CREDIT FILE OVERNIGHT," steer clear. Truly legal credit repair is a gradual process that takes time to complete. In fact, what is advocated here is putting Federal statutes to work in the service of improving your credit standing. Here, laws are chased and embraced -- rather than shunned and avoided. Sometimes members of this community use those laws to actually file lawsuits against abusive original creditors ("OCs" for short), collection agencies ("CAs"), and credit bureaus (officially "consumer reporting agencies" or "CRAs") to meet their goals.The laws we most commonly reference are: The Fair Credit Reporting Act (FCRA), which basically tells the bureaus what they can and can't do. The Fair Credit Billing Act (FCBA), which is a subset of the more comprehensive Truth in Lending Act, which essentially tells original creditors how they should behave. As an aside... I really like this second one (FCBA) It's not one we commonly use in this community... but it forms the basis of most so-called "OC validation" interventions like the Nutcase Series and other good ones you'll see from time to time. More shortly. The Fair Debt Collections Practices Act (FDCPA), which regulates debt collectors. Health Insurance Portability and Accountability Act of 1996 (HIPAA), which regulates health providers. Here's a very very brief way to think about these... The FCRA... Ensures access to credit reports. Regulates who has "permissable purpose" to acquire a consumer's report Limits how long information can be reported. Details how a CRA must handle disputes. And of course... the credit repair intervention commonly associated with this statute is of course the credit

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bureau dispute. We'll delve into the FCRA in more detail in the fifth lesson November 3 (CREDIT 105: FCRA Street Fighting) FCBA: The FCBA requires creditors to bill correctly and completely, and it's the FTC's job to make sure that the statute is universally applied. (But it can be your job to ask that your creditors comply as well, LOL.) The FTC summarizes the statute's prohibitions as follows: "unauthorized charges; charges that list the wrong date or amount; charges for goods and services you didn't accept or weren't delivered as agreed; math errors; failure to post payments and other credits, such as returns; failure to send bills to your current address -- provided the creditor receives your change of address, in writing, at least 20 days before the billing period ends; and charges for which you ask for an explanation or written proof of purchase along with a claimed error or request for clarification." As you read the list of requirements the FCBA stipulates, just think about the credit repair possibilities. Consider something like this: "In accordance with my Federal civil rights as stipulated by the Fair Credit Billing Act, you are obligated to comply with this lawful request for elaborated documentation for billing, including charges and interest, as well as a full accounting of where each bill was mailed, for the life of the account, or rescind these reports from every consumer reporting agency to which you have reported same. Your expeditious handling of this matter is expected." That's something that no original creditor wants to fool with. This constitutes a truthful request for information. Call this example FCBA Nutcase, or call it chopped liver, or -- even better -invent your own creative approach using the statute. Keep in mind that the FCBA is actually intended to assist consumers with CURRENT charges in dispute, however creditors do not welcome the idea that they may have broken the law with your account even several years before. And of course even though you WON'T accuse them of that (because perhaps they broke no laws), they almost always seem to get spooked when asked for such information. We'll cover the FCBA more fully in the sixth lesson November 17 (CREDIT 106: FCBA Street Fighting) FDCPA: What a goodie. Who here has ever sent a validation letter? Great, ok, so I may be telling you what you already know... but a validation letter

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is an FDCPA intervention a quick mind-map of the FDCPA. Provides behavioral standards for acceptible third-party collections behavior. Specifies that CAs must always include several legal caveats in their dealings with debtors. (Before, CAs would employ all kinds of shenanigans to mislead consumers regarding who they were.) Allows the debtor to formally request (i.e., by letter -- hopefully certified and sent with return-receipt requested) that the CA "cease and desist" from communicating with the debtor further. Specifically details a consumer's right to request further information regarding an alleged debt. Such procedures are termed debt validation (as so many here know) and are so POWERFUL that we'll devote an entire lesson to the matter on December 1 (CREDIT 107: FDCPA Street Fighting). You'll sometimes see the credit repair mavens...the titans. LOL, argue about what constitutes true validation or which legal cases require what item, etc. Most of that is interesting if you're way into it... but the wonderful thing is that validation requests often just work. For the same reason that FCRA interventions (aka credit bureau disputes) and FCBA interventions (pestering OCs) work. They simply don't want to fool with your lawful request for information. CAs in particular would rather just move along to the next person who'll roll over. They cost less and pay more. Again, we'll get more into the detail of all of that in the FDCPA session. But I want to talk more here at the start about the PHILOSOPHY of creating interventions. Here's why when you use somebody else's intervention letter, that's fine but when 25,000 people use the same letter, it may be flagged, if you begin to create your own interventions... or even if more people begin to create unique ones... we'll all be better off collectively and it's pretty darned easy! well, it cuts even deeper than just using your own words (although I agree with that wholeheartedly). Pretend for a moment that there was something called the FAIR CREDIT REPORT REQUIREMENT RAZZMATAZZ ACT (FCRRRA). And let's further pretend that that law requires these things: First, let's say that the FCRRRA says that CRAs must send thank you notes to creditors every time they report new information to them. Second, let's say that the FCRRRA stipulates that they must print their consumer credit reports with ink bought only from Cartier New York. Finally, let's say that the FCRRRA requires

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credit bureaus to mail their reports to consumers only on Thursdays. Now, remember that citizens (including you and me as well as corporate citizens) can't pick and choose which parts of a statute deserve compliance. They must comply with the whole act. And if they don't comply with every bit of it, then they've broken the law. If corporate citizens like Equifax or Citibank or NCO violate a statute, they've likely injured a real person, and there are serious penalties for doing so. So, back to our silly fictional federal statute. A good credit repair intervention wouldn't directly accuse the recipient of malfeasance (unless you are sure that they ABSOLUTELY did commit the malfeasance). Rather, the credit repair intervention would simply ask the other party to DOCUMENT THEIR COMPLIANCE with the law. So, in this case, it would look something like...Dear Equifax: Pursuant to the Fair Credit Report requirement Razzmatazz Act, please demonstrate that you sent the required thank you notes to Citibank every time they forwarded new information related to my account (number 12345). Moreover, show that such information was printed with ink requisitioned from Cartier New York. Finally, prove that you mailed the report in question to me on a Thursday. If such documentation cannot be provided, please remove the item from my report immediately. Sincerely, Joe Consumer Essentially you're asking them to document their compliance. In other words, the best way to create a unique credit repair intervention is to take a close look at the federal statute in question (whether that's FCRA, FCBA, FDCPA, HIPAA, or another state or federal law which you believe is relevant), and then ask the other party to show that they aren't behaving criminally. When you approach the matter this way, you aren't crafting lies. You're simply asking a company for information related to your account, especially with respect to how that account has been reported to the credit bureaus. Sometimes companies don't want to take the time to address your lawful request in that manner, and some of those sometimes simply delete the offending tradeline rather than fool with it (or you) anymore. This approach is the essence of the credit bureau dispute (HEY BUREAU -SHOW ME YOU'RE COMPLIANT WITH THE FCRA), the original creditor interventions like the "Nutcase Series" (HEY ORIGINAL CREDITOR PROVIDE

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ALL THIS INFORMATION ABOUT MY ACCOUNT PURSUANT TO FCBA), debt validation (HEY COLLECTOR -- SHOW ME THE HISTORY AND PROVENANCE OF THE DEBT PER THE FDCPA), and HIPAA interventions (HEY DOC -- SHOW ME YOU HANDLED MY ACCOUNT IN WAYS THAT PROTECT MY PRIVACY). Ok, I'll stay away from inventing anymore silly statutes because we've got too many real ones to discuss as we move forward. Still, I hope this example illustrates the similarities among the real credit repair interventions we commonly use. This approach... requesting information basically... is one that lawyers commonly use (what they sometimes term "discovery"). Asking for information is your right as a consumer. Lawyers love discovery simply because of the nuisance factor. And that same principle works for you. Lawyers don't say to their opponent during discovery anything like... "TELL ME WHY YOU BEAT YOUR WIFE (OR HUSBAND)." Instead they'll say... "GIVE AN ACCOUNTING OF YOUR RELATIONSHIP FROM THE BEGINNING UNTIL THE PRESENT." And then they look for discrepancies. If you really do head toward court eventually with some matter, you'll probably collect a few discrepancies vis-a-vis some CRA's behavior... or an OC... or a CA. Does any of this resonate with anybody? (Hope so, lol.) This is basically the core method for how these crazy credit repair interventions get started. You know, I was looking over the transcript for the last lesson... and I received some accolades for a couple of interventions I created... and I thought, "wow, what nice people" and then I thought "wow, I have to UN-snow them" "I have to show them that there's no magic to this" I mean, there's a choice point here for me...continue to indulge the guru thing or just convince others that they are the gurus the second is best, because I'm no guru (LKH will confirm that, LOL!) rich, how do you think I ended up being a shrink? biggrin.gif Once you get the hang of this...essentially that it's about demanding compliance and demanding information then you'll not only be in a terrific position to radically increase your credit rating (i.e., your credit score... the rates you're offered... etc.) but you'll be in a fantastic position to help others... and if you're in this room and I see that even as we near the end of this lesson, we have 37 people still here...then you're probably VERY interested in the topic

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and will likely be among those people who'll help the NEXT group of beginners, this is a terrific community and those of us who care about helping others who've been through what we've been through (like you) want to make sure that it continues to grow... and that new credit repair interventions based upon law are developed well, that's it for this time. I hope something here was useful next time we'll delve into credit bureaus and credit reports ... and credit scores and we'll talk about how to improve your score EVEN WITHOUT these intervention letters then we'll get into the street fighting Court records are tough... tougher than creditor tradelines. There's no harm in asking the court to verify their procedures for reporting to credit bureaus You may see some success. Most people simply dispute and re-dispute with the CRAs until they're gone. You can ALWAYS ask your opponent -- in this case, the court -- for information. Asking for information violates no laws. No, they're not required to delete. Ask them to demonstrate that they abided by all laws. Very interesting. Agreed or do it by letter, certified letter, ok... this strikes me as something that you should also post on the board about being worried re fooling with courts... YOU DON'T OWE ANY MORE MONEY, THE CASE WAS SETTLED biggrin.gif You are now just a nuisance. You're not threatening anybody. You're simply demanding some information. Don't be nervous, lol. THE JOY OF PESTERING that's the key! Ok, see you in two weeks.

END CREDIT 102

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LESSON THREE TRANSCRIPT CREDIT 103: Credit Reports & Credit Scores, 10/6/2005

Tonight's seminar, the third of eight, will focus upon credit bureaus and credit scores. It's nice to see some new faces and some returning ones too. And, let me do something we couldn't have done before the internet: I'd like to welcome those who have discovered these transcripts in future weeks, months, and years. I hope something here proves helpful as you approach your own credit repair. This site, Creditboards.com, is made possible by its owners (you know who you are, LOL), and I would like to express my appreciation once again for their invitation. Ok, in case you don't know who you are... breeze, Pam, LKH, and radi8... I've interacted with each of them through the years, all of whom have poured a lot of care and sweat (and have endured heaping helpings of what we call in Yiddish "mishegoss" in return)...QUICK ASIDE... "mishegoss" is your word of the week. You are all now honorary Jewish people. Ahem. But they have put up with a fair amount of mishegoss...just to benefit others. Their commitment to consumer advocacy is astounding. I'll endeavor not to be a meshugana tonight. Now I'll turn away from such comments with a much browner nose and focus upon our task here. Like last session, I hope we'll all learn something new, but I especially hope that those who are new to their credit repair campaigns come away from these sessions with something which may contribute to their eventual success. Tonight's syllabus... -1-- Course overview and format (which we've already done) -2-- Brief review of the previous sessions -3-- Approaches to debt -4-- Two credit bureau myths -5-- Credit scores

Tonight's session could easily have been the first one... except that I didn't want to set the wrong tone for this. First, credit repair isn't primarily about the credit

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bureaus or about credit scores. Rather, it's about conducting ethical and lawful interventions in order to further your personal consumer credit goals --whatever they may be. Second, so many credit repair interventions (and their co-curricular consumer protection statutes) aren't directed toward the credit bureaus at all. Rather, they're directed toward original creditors, debt collectors, health professionals, and others. ("Others" may include the Better Business Bureau, the Federal Trade Commission, the consumer advocacy site PlanetFeedback.com, etc. We'll begin to talk about these ancillary intervention opportunities in a few weeks, as they can interlace nicely with FCRA, FCBA, and FDCPA based interventions.) Still, it doesn't make much sense to conduct a credit repair course for beginners without at least wearing out the usual yawn-inducing introduction you see just about everywhere, which goes something like this: "There are three major consumer reporting agencies, Equifax, Experian, and TransUnion, and they maintain consumer records on hundreds of millions of Americans. It's their legal responsibility to maintain accurate records, and it's your right as a consumer to ensure that they follow through in that regard." Argh... I said it. I'd like to back up a bit from that, though, and cut through to something more essential, and that has to do with DEBT. Generally, the credit bureaus maintain records (or, perhaps more accurately stated, LISTS OF UNPROVEN ALLEGATIONS, lol) regarding how you as a consumer have behaved when borrowing and repaying money. Even most court records that appear on such reports often have to do with debt. Critically, your GOALS regarding debt will dictate how you go about tackling what appears on those reports. Moreover, HOW YOU BORROW and HOW YOU REPAY debt are perhaps the two greatest influencers of credit scores. Manipulating ones borrowing and repayment patterns is perhaps the quickest way to raising a credit score -- even, in some cases, irrespective of what actually appears on the credit report. More about that in a minute. For those reasons, it's important to step back a bit from the credit repair task, especially at the beginning, and take stock of ones own approach to DEBT. That's really what this is about. Suffice to say, this isn't what some folks want to hear. Nobody wants to be reminded to floss after brushing. For that

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reason, I won't spend too much time on this, but I would be completely remiss if I didn't at least acknowledge the obvious: DEBT is what caused so many of our problems which necessitate credit repair in the first place, so perhaps 5 or 10 minutes of this will be appreciated by someone out there at some point. As an aside, I really like an article which appears on Creditboards (LINK) called "The Problem with Debt Settlement Companies" written by radi8. He discusses a widely advertised -- by a seemingly limitless number of companies -- method for dealing with debt. It's a must read. There are many approaches to debt, but here are two wide categories: 1) Wealth accumulation. 2) Eternal indebtedness. Expanding these... 1) Is your long term goal to accumulate wealth? It almost goes without saying that the wealthiest people (and the wealthiest corporations, for that matter) have little debt and lots of money. If becoming more financially stable is your goal, then reducing outstanding balances low should be an objective. Interestingly, this approach has a credit repair benefit: your credit scores will rise. Most importantly, you'll be less susceptible to fiscal disaster if you have an emergency fund of real cash in case something unexpected happens.OR... 2) Do you regard a brand new credit card as INCOME? In other words, when the shiny new MasterCard arrives with a $10,000 limit, are you already thinking about that home theater system you can buy now? If so, then you may find yourself overextended (and for most of us here, I should add the word "AGAIN" -me included), unable to repay everything in a timely manner, and perhaps right back where you started. Obviously, I would encourage anyone in the second category to at least begin to think about how they've embraced and accumulated debt. Ok, let's assume that accumulating wealth (the first category) -- and so, in other words, reducing debt -- isyour financial goal. How will you do it? There are three general approaches: 1) Reducing debt as quickly as possible. 2) Reducing debt the least expensive way.

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3) Reducing debt in a way that will maximize your credit scores. While all three of these are worthy objectives, they are very different. And by the way... If your goal is to reduce debt as quickly as possible, then you may not be able to do it the least expensive way... Likewise, if you goal is either of the first two, then you may not be able to do it in ways that will maximize your scores...So this is about making choices...The first approach reducing debt as quickly as possible -- usually involves what Dave Ramsey and other authors have termed the "debt snowball" approach. By the way, does anybody here ever listen to Dave Ramsey? He's an anti-debt fanatic. That isn't my approach. But he represents a viewpoint. His is an extremely compelling argument. Plus he's entertaining. I recommend at least listening to what he has to say even if you (like me) aren't an anti-debt nut. (With apologies to "nutty" here, ahem.) Dave Ramsey's debt snowball approach involves repaying the smallest debt first, then when that's taken care of, taking that payment and applying it to the next largest one, and so on until everything's paid for. This approach affords psychological advantages relatively quickly because it's encouraging to repay something entirely and then move to the next one in turn. The disadvantages of this first approach are... a) Even if it's the most encouraging way to tackle debt (which is perhaps the most critical factor for some people), it's not the least expensive way since you're focusing on repaying the SMALLEST DEBT first -- and not the one with the highest interest rate...and b) It's not the most efficient way to raise your credit score, since it may well be that the larger debts are ones which involve maxed-out revolving credit lines (a score killer). The second approach reducing debt the least expensive way -- is the approach favored by people like Suze Orman. Now Suze doesn't know much about credit repair... LOL yep... ha... but she does offer an approach to debt reduction... Hers involves prioritizing debt according to the actual cost of the money -- in other words, the interest rate and paying off the most "expensive" debt first. The advantage of this approach is obviously the cost savings. This is different from

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the first obviously. The disadvantage is that you can easily feel like less progress is being made especially if the most expensive debts are also your largest ones. Also, like the first "debt snowball" approach, the focus isn't on your credit score. two very different approaches The third approach reducing debt in ways that improve your credit score -- involves equalizing balances so that no debt's "utilization ratio" (the amount owed divided by the overall line of credit) is high and then paying down the various debts equally so that all the ratios lower together. Again, this approach can result in DRAMATIC differences to a credit score, but doesn't afford the psychological advantage of Dave Ramsey's "debt snowball" nor the cost savings of Orman's approach. So it all depends upon your goals once again. By the way... the use of the term "utilization ratio" brings us squarely into the realm of credit bureaus and credit scores... Does anybody now know what I mean by that? Just in case...Your utilization ratio is the amount you owe on a debt divided by that debt's line of credit. For those who are new to all of this information... Keep in mind this heuristic...LOWER UTILIZATION RATIOS = HIGHER CREDIT SCORES That's true whether we're considering an individual debt...and it's true when we're considering all debt...will give an example... but You apply for revolving credit and keep a low balance. :) That's the irritating thing about credit. You've got to struggle to improve your rating (your reports, your score)... and then you'll qualify for more that will help further. interestingly, DTI (debt to income ratio) doesn't really matter much unless you're buying a house no problem I'll give an example... and then tackle cred's question example...You've got a Chase MasterCard with a $10,000 line of credit And you've only spent $1,000 of it. That card has a 10% utilization ratio. That an example of a tradeline-specific utilization ratio. Now, overall...Let's say you have three revolving lines of credit...And the overall credit available to you is, let's say... $20,000... If you've spent, say, $5,000 of that then what's your overall utilization ratio? (simple math) Credit scores take into consideration BOTH types of utilization ratios. SO... Any consideration of improving your credit scores will ALWAYS factor in HOW your borrow and repay your debt. Interestingly, some people (me included) believe that this is the LARGEST factor in credit scoring

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(aside from having a bunch of negatives, LOL... but all things being equal...) Debt is never a fun topic when raised in a milieu of people who love credit cards (like me, ha) but it's a necessary topic... not only in terms of fiscal health...but also with regard to your CREDIT SCORE which DOES interest everyone here I think. OPEN accounts contribute to the score. CLOSED ACCOUNTS don't help... and can hurt IF there's an outstanding balance. That's why the most common advice you'll hear is... "Don't start closing accounts willy-nilly." Even the erudite Suze Orman says so, LOL. And she's right. Ok, so long as we've established what we're really talking about here -- i.e., DEBT -- let's turn to busting two common credit bureau myths. First, let me ask a trick question...Which federal law establishes the credit bureaus as official quasi-governmental entities? MYTH 1: Credit bureaus are officially recognized entities. WRONG. Credit bureaus are private companies (at least one is publicly traded, but it's still owned by its shareholders) which are in the business of buying and selling financial gossip about you. And what's gossip? Gossip is, at best, a list of unproven allegations, and that's all a credit report is. By the way, that's WHY the Fair Credit ReportingAct became law in the early 1970s... in order to regulate what they CAN'T do. (More about that two sessions from now.) A credit report doesn't even enjoy the official legal status of, say, your driving record maintained at your local statehouse. It is unfortunate, then, that these unofficial credit reports sometimes impact our lives far more than most any official document which exists. Well, that's the way the lending industry has evolved. In the old days... like in our grandparents' time... You'd go visit the banker. Who you probably went to church with. And he (and in those days, it was always a he) he knew you. There were credit bureaus. But that wasn't the primary consideration. Unfortunately, other considerations that AREN'T helpful intruded. Like, for example, a banker's social preconceptions... whether he thought women were creditworthy... or racial prejudice, etc. So life wasn't rosy for everyone. Incidentally, that's the stated rationale for credit scoring as well. On to myth two MYTH 2: Items on your credit report are required to remain for 7 years (in most states), except for bankruptcy related items which are required to remain for 10

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years. myth... WRONG. When you speak with the nice customer service person at Sears, and they say something like, "Oh I'm sorry, Miss Jones, there's nothing we can do because those things are supposed to stay on your report for seven years," you should know that-- their niceness notwithstanding -- you're either speaking to someone who is terribly misinformed (at best) or someone who is deliberately lying to you (at worst). That may be a company's policy and the credit bureau's policy, but it's not the law. The FCRA simply places LIMITS upon what can be reported. It doesn't MANDATE reporting though! This is one of the most insidious lies related to credit reports which we have embraced as a society for whatever reason. There is no requirement, legal or otherwise, that private companies must buy and sell information about you to others. Confronting what appears on your credit reports, especially if done using ethical means, is simply your way of saying: "Hey, I don't appreciate corporate titans who choose to violate my privacy." Keep these two myths in mind as you go about the task of confronting what appears on your credit reports, someone should bring a class action lawsuit against any consumer reporting agency that says something like: "Negative items must remain on your credit report for 7 years in your state." That is an oft-told lie, and I can't wait for someone to challenge that kind of misleading information. Of course, as long as we sheep believe, LOL...their business is safeguarded. Which brings us to credit scoring... LOL,Here's what you see everywhere...and it bears repeating for those who are new to the material...35% of your score is influenced by account history (how timely you've paid), 30% to current account usage (how much of your credit is being used, with greater amounts being negative) which is the "utilization ratio" we discussed before, 15% to length of credit history (the longer the better), 10% to new credit inquiries and accounts (with fewer being better), and 10% to the "credit mix" or variety of credit types present. Scores range from 350 to 850, with the mean value score being right at 725. In real life, the most favorable credit rates are typically extended to those with scores of 720 or above. That's what Fair Isaac Corporation (the FICO company) wants us to know. They DON'T tell us something else, though. And

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perhaps someone in this room will one day sue their pants off, LOL... and it's this...QUOTING MYSELF from another venue: "Your credit score isn't just about you. If it was, providing it along with the rest of your credit report might not violate federal law, which stipulates that your consumer file must only (and obviously) be about you. Rather, it's about you and others. More specifically, Fair Isaac makes use of what they call "Score Cards," which groups consumers according to whatever criteria they choose. Then, they run what we statisticians call Pearson correlations between credit report items and subsequent late-pays for each consumer grouping. Through that continuous process, Fair Isaac stays on top of the variables du jour which may diagnose bad future news. The final step happens when your credit report is pulled and is analyzed through the use of those comparative algorithms, and a credit score is then reported which purports to predict the possibility that you are the type of person who may one day become seriously delinquent." Now, I'm a statistics wonk... But what that boils down to (for those who hate stats)...is that basically a credit score indicates the PROBABILITY that a consumer will Credit scores are about helping lenders PREDICT who will default. It's all about helping banks determine who is in the group of people who may not repay them. The problem is...In any grouping like that... There are the false positives... i.e., those people who will NEVER default. And, interestingly, those people are in the majority... even among those who have relatively low credit scores. So... we all pay for the mistakes of the few.To quote myself one last time:"So does this sound kosher? Are prediction and speculation and comparisons with other consumers fair items to include in a credit report alongside the stuff that otherwise really is about a single consumer? undoubtedly, the judiciary will eventually decide." This is why someone needs to challenge the legitimacy of the credit reporting and scoring industry generally. I don't believe that they are honorable enterprises. Ok... to cled's question, Try not to confuse the credit score number with what I was talking about when I mentioned "utilization ratio" The actual FICO score is just an INDEX OF PROBABLE DEFAULT That's not to say you didn't ask a great question... People often ask things like..."If I apply for credit, how many points will an inquiry take

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off." Now, even though the answer to that is usually "2 or 3 or 4" LOL... (I shouldn't fall victim to answering, LOL)... The real answer is this... People who apply for LOTS of credit are among that statistical grouping of people who are MORE likely to default...So the more inquiries you have, the more you resemble that group of probable defaulters. Similarly... people who have defaulted in the past are statistically MORE LIKELY to default again than people who never have, so... the presence of R9's are poison. (R9 is Equifax's designation for a chargedoff or collection revolving account.) Well... people who have 60 day lates STATISTICALLY RESEMBLE probable defaulters MORE than say those people who have only 30 day lates (or no lates) Again, it's about comparing you to others. And I (and some lawyers I've spoken with) believe that when a credit bureau includes a credit score, they may be breaking the law. Consumer credit reports cannot include information about other consumers, and the credit score essentially does that. But that's for tomorrow's litigation, LOL. Some people say that an ideal utilization ratio is 10%. Others say 5%. Still others say, "keep it below 30%." I think everyone agrees that anything above 50% is hellish on a credit score. (Not to mention that it's hellish on your fiscal health. But there I go talking about flossing again.) ;) The truth is this...People with LOW utilization scream "responsibility" to them. Ok... Now... A few words about raising your credit score. What follows is conventional wisdom you'll see elsewhere, but I agree with it wholly. 1) Eliminate negatives, but do so using ethical means. 2) Pay down revolving credit. 3) Stop taking advantage of installment loans (other than a mortgage and car payment) 4) Don't close accounts. And, yes, I mean open revolving lines. That's advice for beginners. When you become more comfortable with your GOOD credit (after your credit repair succeeds)... then you'll tweak things...You'll apply for a super premium MBNA card and close your Capital One card, etc. But a good rule of thumb here at the beginning is... Don't start closing accounts here, there, and everywhere. And when it doubt, post to the boards here and get

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advice. Well, that's it for tonight! In two weeks, we'll discuss some overall strategies for taking a credit report, triaging it, and devising your best game plan. Then we'll delve more deeply into the down-and-dirty credit repair tactics we love the most. I hope something here was useful for somebody tonight! :) LOL! student loans are ok when you need them... but interestingly, those student loans will depress a score. Doesn't that suck? How do I know? I've seen it myself. Now, interestingly...Now don't just go and dispute something like that off just because... they may be your only positive items! In which case...they'll add more than they take away. Credit scoring is a dance. I would never advise people to lie. But... There's no harm in using the approach we discussed in the first two sessions... which is..."Please demonstrate that this inquiry was included on my report as a result of the company's permissible purpose... in accordance with my federal rights." You can still ask the bureau to demonstrate that. It will be much tougher to remove, for sure. Inquiries that DON'T have an attached active tradeline are termed "orphaned inquiries" by some attorneys I associate with, and those are much easier to remove...Still, inquiries are tough period as you know. One risks having the report (and the account) flagged. That's true of almost all credit repair interventions though. Flagged = noted as being an identity theft victim... makes it tougher to get new credit,once again it's about your goals (reference the section of tonight's session regarding the three types of debt repayment) If your goal is to improve your scores... then definitely pay down your revolving credit. If it's about other things (ref. earlier paragraphs) then pay the student loans.

END CREDIT 103

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LESSON FOUR TRANSCRIPT

Tonight's syllabus... -1-- Course overview and format (which we've already done) -2-- Brief review of the previous sessions -3-- The purpose of "triage" -4-- Credit repair rules of thumb -5-- YOU are your guru

Each session builds upon the previous ones. Now on to "credit report triage"... As an aside, you gotta love the internet. For those who enjoy sound effects, here's Merriam-Webster's Stepford Person pronouncing the word for all of us... Link: http://tinyurl.com/dze2z I know, I know... that was so pedantic of me I can't help it. Anyway, as you know, the term "triage" is borrowed from war battlefields where medical personnel deal with groups of injured soldiers. Generally speaking, the wounded are divided into three groups (hence "triage") -1) the most seriously injured who require immediate attention in order to prevent death, 2) those with serious injuries who aren't life-endangered, 3) the walking wounded who will still require first aid but who can assist the EMTs with the other two groups but we'll pretend nothing's "dead"on a credit report, lol Actually I borrowed my definition this afternoon from Wikipedia so there I feel like a giant cane is about to enter stage left and pull me away now :) Simply having a plan for what must otherwise be terrifying circumstances helps first responders cope. Similarly, knowing that there is an organized way to proceed (with any endeavor) helps one get past the fear of starting any sizable task. Was anybody here (who's already begun their credit repair program) ever intimidated by the task when they first got started? Well I felt the same way at one point. Sometimes credit report issues are so plentiful that it's easy to feel

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like one is about to fight a war (of sorts). My goals in adopting the metaphor are threefold: 1) Impress upon you my belief (shared by many in this community) that practically no bad credit rating is beyond repair. 2) Empower you to approach each of your three credit reports with optimism and a sense of fun as you delineate your plan of attack. 3) Provide some concrete rules of thumb for matching tradelines with appropriate credit repair interventions. So... whether it's gossipy bureaus... or petty creditors... or ruthless and unethical debt collectors... there's a systematic approach for each. For those who haven't begun, here's "PsychDoc's Plan of Attack" (licensed to you only for your own individual personal use under the "GNU General Public License" but not for use in any commercial setting). :) Let me emphasize before I delve in, though, that this is simply my approach. I don't want to represent this as the "correct" way, or the "right" way, or the "only sensible" way, or anything of that sort. That said, I'll proceed...

PRELIMINARY STEP: Go to Kinko's (or your office copy machine, or wherever) and make COPIES of your latest credit reports. Keep a set of "clean" originals in a file somewhere, though, just in case you ever need them as evidence in a court proceeding. I realize that eventuality is unlikely, but that's still a good idea. As for the COPIES, you're about to take a nasty red marker and mark them up as if they're a graffiti wall somewhere. Spare no mercy. Those reports are the work of the devil. (And if not the devil, then at least the work product of corporate drones who probably care less about your personal welfare.) STEP ONE: Keeping our second session in mind (CREDIT 102: A Consumer Law Overview), you're going to assess each item on your report and assign it an appropriate credit repair intervention. First, comb through your reports and look for those tradelines (credit industry jargon meaning "an item on your report") where you were never more than 30 days late. And, by the way, don't cheat...

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we're NOT going to include anything with 60 day lates or work during this pass... Now, you're going to write the word "GOODWILL" next to each of those tradelines. By the way, if you're completely new to all of this, then don't worry what that means right now. Just do it. You're triaging. :) STEP TWO: Now, you're going to make a second pass through your reports. This time you're hunting for any tradeline whose worst notations are 60 days late. For these you'll mark "GOODWILL OR FCBA." More in a few minutes about that. STEP THREE: Now, on the next pass, you're going to label those items whose worst notations are 90 to 150 days late and which NEVER entered collection or charge-off status. Mark those as "FCBA OR NUTCASE." More about what that is in a few minutes also. Ok, ok, ok, technically we're going past "triage" now... Perhaps we'll have to coin a new word..."quattrage" or even "pentage" or "sextage" (because, YES, there's going to be fourth, fifth, and sixth steps, ahem). Those of us who appreciate 12 Step Programs are welcome to say the Serenity Prayer now. (Actually, that may help with this task, but, alas, I digress.) And, NO, "sextage" doesn't guarantee any additional fun when you're through. (Although, actually, that may help too, but now I'm way off topic. Cough, cough.) STEP FOUR: Next look for items that have entered collection or charge-off status. By the way, Equifax includes their handy "R9" or "I9" designations, which will help make short work of this task with that bureau's reports. If the tradeline was placed there by a third-party debt collector (in other words by "XYZ Collection Company" as opposed to "MBNA"), then mark those tradelines with the phrase "VALIDATION." If the chargeoff was put there by an original creditor, mark it "OC VALIDATION." Don't worry about the wizened souls who proclaim that there's no such thing as "OC VALIDATION" at this point. They're right, but those of us who advocate differently are right too. Kindly sit with the tension for a moment, and I'll get back to it in a few minutes. (Suffice to say, groups of us have been debating this for years. Meanwhile, consumers are netting credit report deletions, irrespective of the technicalities.) STEP FIVE: Up to now, no tradeline has received more than one mark. That may change with this step. Mark it VALIDATION if a CA and OC VALIDATION if an

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OC to Step 5... This step requires you to work through your reports and locate any MEDICAL tradelines. If the item was placed there by a doctor, a hospital, a testing lab, or someone collecting money for any of those, mark this one with the acronym "HIPAA." Note again that you may be writing "HIPAA" next to something which was already labeled "GOODWILL," "GOODWILL OR FCBA," "FCBA OR NUTCASE" or "VALIDATION." a tradeline may have more than one notation STEP SIX: Anything left is probably there as the result of some legal action -- a lien, a bankruptcy notation, a judgment, etc. Go back and mark those COURTHOUSE." Now you have the rough outlines of a plan... with plenty of flexibility. Each of those notations reflects a particular credit repair procedure. Your "GOODWILL" tradelines are due a Goodwill Letter. This is where you need to do your homework search the board for the basic template. The "Goodwill Letter" saw its origins in a letter penned by "marci" (an occasional participant on these boards) which she called her "Sample Nice Letter for Paid Chargeoffs." I borrowed marci's letter (lifting a couple of her brilliant key phrases), reworked it for those tradelines with minor late pays which had never charged-off, and dubbed it the "Goodwill Letter" after a rep for Sears National Bank told me by phone that they had an internal phrase for certain nice people who begged forgiveness --the "Goodwill Adjustment." That sounds like something a chiropractor would do... :) Regardless, the approach is tried-and-true, and while nothing works all the time, this one does work some of the time. Has anybody ever had success with the Goodwill letter? I realize most in here are new... some no's... some yes's Let me diverge from the prepared remarks for a minute... I have a philosophy about credit repair interventions... The philosophy is this... Let's say that a credit bureau dispute will work 5 or 10 percent of the time or even 20 percent... and let's say that a Goodwill approach will work 5 or 10 percent of the time and let's say that a Nutcase approach will work 5 or 10 percent of the time FCBA same FDCPA validation same, etc. and then you try again...somewhere down the line you're going to clean it up... persistence and a

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variety of approaches is key I just hate it when I see somebody really punishing themselves after they try an intervention and it doesn't work. They despair... OH NO... IT DIDN'T WORK I'M DOOMED It's just horrible because you know how they feel... which is terrible but if they kept in mind that each intervention has a chance of working and that interventions can be REPEATED and in some cases... some tradelines can call for multiple interventions per the triage approach I just outlined above Your chances of succeeding during the next year or so... are HUGE. Be encouraged. I should put that in all caps: BE ENCOURAGED. :) Ok, for those tradelines marked "GOODWILL OR FCBA" you have a choice. You might try one or the other. Or you might try one and THEN the other. Refer to the second session for commentary regarding the FCBA approach, and customize your own. You approach it as quickly as possible. Those tradelines marked "FCBA or NUTCASE" also present a choice. Try one, or the other, or do both (space them apart awhile). The "Nutcase Series" enjoys a good number of testimonials, and a template and accompanying rationale can be found on the board Again, nothing works all the time, but taking NO action ensures failure, so buck up and move forward! The following sentences should not substitute for your doing just a few minutes of homework and reading the rationale here on the boards, but here it is anyway in a nutshell Essentially, the Nutcase approach can be summed up as a polite but escalated set of information requests. Your questions likely compel the other side to wonder what you plan to do next... Will you sue? Are you a "litigious nutcase"? Sometimes, creditors would rather just go ahead and delete a severe late mark than risk (or waste their time) tangling with you any further. As an aside, has anybody seen success by trying the Nutcase series yet? Let me say something about "required"... You'll sometimes see one of us old fools say something like... "Address it in a red pen." "Then fold it twice." "Three times along the seam." "Then address the envelope in purple ink." And on and on and on. Sometimes there is a reason for that... Maybe the oldtimer wants you to NOT look like a credit repair organization... Well... lemme tell

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ya what I know about CROs... they break out the purple pens sometimes so I'm really at the point where I hesitate to get so specific. Next, those tradelines marked "VALIDATION" should receive a formal request for validation pursuant to the FDCPA. (Again reference the transcript for seminar #2.) You'll find a template for the letter, as well as its sequential successor termed by some the "Estoppel" letter, here on Creditboards. Plus, you'll find no end of discussion and debate regarding such interventions. Again, I would advise that you spend some time (a few hours) reading about validation before you fire these off. Also remember that the larger the amount of an alleged outstanding debt, the greater the risk that you'll "awaken the giant" (search the board for that phrase). If in doubt, seek legal counsel, or at least ask for the advice of fellow travelers on the board. Quick point of discussion... Has anybody succeeded with Validation? Now, there are in credit repair, as with most areas of interest, topics which are controversial where perfectly smart and right people see things differently. In credit repair, one such area involves the notion of "OC VALIDATION" (i.e., "original creditor validation"). The FDCPA only (well, almost only, but we'll not get into more advanced and arcane debates in this beginner session) regulates third-party debt collectors. So, technically, heapings of respect should be accorded those who maintain that there is no such thing as "original creditor validation." Incidentally, in this regard, you'll find people on the boards debating who "verifies" versus who "validates" and similar arcana... So technically, it's true... original creditors verify and don't validate That said, I've seen plenty of people net credit report deletions by sending the STOCK validation letter to original creditors, irrespective of whether or not the OC was actually required to do anything at all, and arguments about words notwithstanding. I personally have never enjoyed the verify/validate wars, but I have enjoyed watching consumers win their credit repair battles. One possible semantic solution I've recommended... Take a validation letter, substitute the word "verify" for "validate" and substitute references to the "FDCPA" with references to the "FCBA" and fire them off. Whichever position appeals to you, you should know that sending a stock validation letter to an original creditor does

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not abridge your rights as a consumer in any way. So, for example, if you send the "wrong" letter, perhaps the OC will write you back and say, "The FDCPA does not pertain to us. Thank you. Now go pay the people to whom we sold the debt." What they can't do is slap the cuffs on you for daring to ask for information about the alleged debt. The debates almost get political, and I'll dare not make a claim regarding "what's best" because many well-informed people I respect disagree with each other. My goal tonight: at least beginners who read this will perhaps now better understand what the argument is about generally when they come across it here or elsewhere. QUICK CROA DISCLAIMER: I am not an attorney, and this is not legal advice. Second, never misrepresent your situation when sending letters to anyone for any purpose. Now... on to HIPAA This requires more homework. (Sorry, but there's no way around it.) Search the board for the term "HIPAA". I especially appreciate all of WhyChat's comments and advise regarding how to use this statute. In a nutshell, no medical provider wants to entertain the possibility that their credit bureau report has violated your federal privacy rights. That simple but lovely concept defines the approach. :) The irony is that you could try that same intervention in 4 or 5 months, and it might work. Of course, by that time, a bureau dispute may have done the job. It's all about persistence. Clouds, speaking as a shrink, I can confirm your hypothesis. LOL! Now, I don't want to suggest that every medical tradeline is necessarily appropriate for a HIPAA-based credit repair intervention, so, again, do some research on the board before proceeding in this regard. A number of approaches have been detailed regarding courthouse notations... A detailed discussion of these would absolutely extend well beyond the parameters of a beginner's seminar, but the boards contain many relevant discussions worth exploring. At least you've marked your credit reports for those tradelines which may be appropriate for one of these approaches. Finally, every single item on a credit report merits FCRA verification by requesting same from a credit bureau. That means that essentially every item on your reports will be matched with at least two interventions... one sent to the bureaus... and one sent

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to whoever placed the item on the reports. In the next three sessions, we'll detail FCRA (bureau-directed), FCBA (OC-directed), and FDCPA (CA-directed) approaches in more detail. Such discussions will also include at certain points what some term "the one-two punch"... an approach which leverages both bureau-directed and creditor-directed interventions in tandem in order to effect a particular result. Stay tuned. Finally, let me move to the last section of tonight's syllabus which is really just a simple reminder... You really are your own guru. Or at least I hope you eventually will be. The more educated you become to credit repair, the more you'll find yourself entering into the many excellent debates regarding law, approaches, philosophy, and even attitude. Perhaps there is a right answer, or perhaps every wizened old-timer has a piece of the truth. Ultimately, the more you know, the better you'll be able to decide how YOU feel about any number of controversial issues. And with that, I hope somebody new here feels MORE EMPOWERED to dig into their reports in a SYSTEMATIC WAY... and then do some co-curricular RESEARCH on the boards to learn more about the various interventions you've designated. Now, on that note, it's time to end... I'll look forward to seeing you in two weeks when we talk more about FCRA interventions you can employ with the bureaus. We'll also excerpt actual letters in the next few sessions, but don't wait for that... Delve into the boards now and wear out that SEARCH button! :) tell me... well, she can still ask the OC to document that they have crossed every t and dotted every i you can pester a paid OC like crazy without lying until they are just sick of you One thing I like to say to folks... NO LAW LIMITS YOUR NUISANCE (Unless you get violent or threatening... lol) So have at them. Eventually they'll wonder if it's worth it to report that 60 day late tradeline. Breeze hit it on the nose. well... See you in two weeks. :) I hope this helps somebody at some point! Thank you too. :) on to life get those markers!

END CREDIT 104

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LESSON FIVE TRANSCRIPT CREDIT 105: FCRA Street Fighting, 11/3/2005

Tonight we examine what is obviously a very important component of anybody's credit repair campaign -- the credit bureau dispute. I didn't want to give the wrong impression that credit repair was mostly about credit bureau disputes... Lots of people believe that, but I don't. I'll mention why in a minute for those who are mystified by that, LOL! For the first four sessions, I mentioned the Creditboards site owners for all they do to keep this site up and running, but I'm going to do something different for the second four sessions. Tonight I'm going to thank the owners of other sites for all they do. Actually, for the next four sessions I'd like to recognize those hard-working (and heretofore thankless) Creditboards Forum Leads and Mods... Can we have a rousing round of applause for (in alphabetical order) cotterpin, CramItCCCAs, fla-tan, HDAlex, MarvBear, rigirl, TeeSharice, and TxQuiltGirl? (Did I leave anybody out??? ...or include somebody who'd rather not be included anymore?... If yes, I'll correct that on the transcript, LOL!) Tonight's syllabus... -1-- Course overview and format (which we've already done) -2-- Brief review of the previous sessions -3-- FCRA overview -4-- About disputing -5-- Types of disputes -6-- About inquiries -7-- Expectations Well, on that note we'll dive into tonight's material. In the second session we began to describe the various components that comprise the FCRA. Now, there are entire multi-day seminars devoted to the topic. Lawyers pursuing CEUs attend those... We obviously can only skim the surface... But what I'd like to do is highlight those things that may be of particular interest (AND HELP) to you. CEU = continuing education unit... In most states, lawyers and other professionals have to engage in a certain number of hours of continuing education in order to

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retain their licenses to practice. The Fair Credit Reporting Act of 1971 ... accorded all of us some basic rights regarding what credit bureaus said about us. Before that time, credit bureaus engaged in some very questionable activities. For example... The company that became Equifax began life as the "Retail Credit Company" in Atlanta, Georgia. That was the old Atlanta credit bureau. Retail Credit grew and became the primary bureau in the southeast, and they had a snugly relationship with Welcome Wagon. Does anybody remember the Welcome Wagon ladies (and they were almost always women)? Well... Some do, some don't... you'd move into a neighborhood and a couple of very friendly women would come to the door with a little basket of goodies... coupons, info, etc. and welcome you to the fair city. They would then make careful notes about the family. Did it seem upstanding? Did anybody smell of alcohol? What color was the family? (I kid you not.) This kind of data was then transmitted back to headquarters... And the good old Retail Credit Company would include stuff like that on your credit report. Oh... another one...Was there a man in the house? (Families not headed by a male were considered by some bankers to be less creditworthy and more risky.) Some of the abuses were essentially erased by the civil rights legislation of the 1960s. The Civil Rights Act in particular erased some of that, but some of the abuses continued. By the late 1960s there was an uproar, and Congress finally passed the FCRA in order to help all of us. For the first time, consumers are able to actually take a look at their credit reports! Believe it or not, before that time, ordinary folks couldn't even take a look. There were no restrictions upon WHO could actually pay the credit bureau to see your information. And so on... In 1971 the FCRA took effect. And the Retail Credit Company changed its name, Equifax. It was a nice break from the abusive past. The smaller bureaus like that... For example, CBK in Knoxville, TN was bought by Equifax In other parts of the country, other large bureaus consolidated...The old Chicago bureau... The Credit Bureau of Cook County... became TransUnion and gobbled up every other bureau in sight. Similarly two other large regional bureaus combined to create Experian. Nobody crowned these companies with an

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official tag. TRW was one of the two companies that became Experian. Ok, enough history... The FCRA... 1) Ensures access to credit reports. 2) Regulates who has "permissable purpose" to acquire a consumer's report. (in other words, gives YOU certain rights about who puts inquiries on your reports) 3) Limits how long information can be reported. (generally 7 years for regular tradelines and 10 years for bankruptcy-related ones) 4) Details how a CRA must handle disputes (more about that in a second) And the recent amendment to the FCRA... FACTA...even gives us all the right to free reports from each bureau once a year. Typically... You'll see old-timers give some initial advice to consumers BEFORE they start disputing with credit bureaus. 1) Opt-out. (In other words, let the bureaus know you aren't open to promotional advertisements and offers.) and 2) Dispute multiple names and addresses that may appear on your report. So you pick one and dispute the others... If your name is Robert Sheldon Poole... you may have R.S. Poole on the reports as well as Bob Poole and a half dozen others. Now... does anybody know what the rationale is for OPTING-OUT (other than offers can be a nuisance)? Well, those may be reasons... But some people believe this... Since the bureaus are engaged in the business of buying and selling information about us... those of us whose reports are in OPT-OUT status are less valuable... and therefore what appears on our reports just doesn't matter as much... so... (and I'm not sure I subscribe to this, but I'm not sure I don't either) Disputes from those of us who've opted-out may be easier to accept... than from those whose reports are juicier. Again, I don't know if that's just a bunch of crap or not. BUT Some folks I respect here believe that mightily and seem to have anecdotal evidence in support of that belief. I know some people here must have wondered, "Why in the hades are they suggesting I opt-out all the time, lol?" "I like junk mail, after all." Etc. LOL! Well, that's the reason. LOL,

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good enough, Now... About the second reason... Anybody know the credit repair rationale for disputing multiple names and addresses? Actually yes. Again, some folks believe that the automated systems in place verify one data point or another. The fewer bits on the report, PERHAPS the hard to verify. So... Very smart people on both sides of the discussion sometimes debate this. I'm not going to take a side...(Not because I'm afraid to take sides, LOL!) Rather, I'm just not sure. It seems reasonable. But we don't know for sure. Some folks swear by the advice, and frankly, extra names and addresses are probably the easiest thing to remove. If I was pressed, I would say... Go ahead and opt-out and then dispute the extra names and ALL your previous addresses. Just do it. Ok... Now on to About addresses, either way. Sometimes the easiest thing to do is just call 'em if it's just the addresses... Remember that when you're disputing addresses, you're not contesting information about account payment history. They don't see it as critical information that must be retained. Call 'em, write 'em, send a smoke signal. Get an uncooperative phone rep this week? Call 'em again next week. More about disputing... Before we move onto the types of disputes... Disputing is not the end-all be-all of credit repair. Probably the one thing you'll learn here on Creditboards is that what most credit repair books say about the topic is VERY short-sighted. Credit bureau disputes are simply ONE intervention we use. Anybody who's new to this series of seminars is referred to the transcript for Session 4. Other intervetions... Goodwill, FCBA, Nutcase, Validation, etc. Now... Some ask... should I do the credit bureau disputes first? Or the OC/CA interventions first? If it was me... and I want to emphasize that this is BY NO MEANS the "right" answer... I would begin with the creditors. When a credit removes an item, it's gone from all three bureaus in one swipe. That's a three-fer! There are quite a few, and you select them based upon the type of tradeline, account, etc., whether it ever charged off or not, whether it was a minor late pay or a major one, etc. Keep in mind... Once you do a dispute with a bureau and they "verify," the bureau may not entertain another dispute for awhile...They may report back "previously verified." You may have to wait 6-12 months before they give it another go... But if you do your work with your creditors / CAs / etc., first,

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then you may clean stuff up before wrestling with the bureau personnel. Keep careful notes in case you ever take 'em to court. More in Lesson 8.... let me tackle a few VERY good questions... 1) There are several different "clocks"... there is the disputing clock that begins when you send one to the bureaus... They are supposed to investigate within what the statute terms a "reasonable period" held by case law to be 30 days typically although no judge will toss the book at them for 45 or even 60 days if they end up doing the job ignoring you is another story... or as tal said previously... refusing to investigate again at all 2) Another "clock" is the one that has to do with validation... We'll talk more about that in lesson 7 3) Another "clock" is that statute of limitations for debts. I would recommend that you search the board regarding "SOL" or "statute of limitations" for that. So there are several clocks. Sometimes consumers confuse them. ... and there is a clock regarding their response time more about that in Lesson 7... too much material tonight... Just getting my bearings... Had recommended that you intervene with the creditors first... About the comment "low-hanging fruit"... Remember that what's low-hanging with one bureau may be your toughest on another. Just no rhyme or reason sometimes. The best low-hanging fruit is when Sears says, ok, what the heck, we'll send UDF forms to the bureaus and remove your late pays. And that's a WHAM-three-gone. Zowie, that sounds like a question related to debts that are allegedly outstanding. We'll tackle those topics in the FDCPA session... #7 LOL! Now... About the TYPES of disputes... I casually mentioned one type of dispute in the very first session. Those who have just joined this series are referred to Lecture #1. I mentioned the importance of honesty... and that you could send disputes that essentially said something like this... (Several NON-LYING credit bureau intervention examples follow, and those appear in red italic type.) "Please demonstrate that the following tradeline(s) appears correctly on my report. Otherwise, remove, in accordance with my

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federally protected civil rights." (etc.) That created quite a stir on the board. I read a few threads where people embraced that quickly. (Which is fine.) But I fear that they may have embraced that single technique to the exclusion of others... And I'll describe some of those others tonight. I noticed that some achieved some good deletions. Others mentioned that it didn't work for them. Keep in mind this: NO intervention ever works all the time. That's why... we advise a variety of approaches... and REPETITION throughout the year. In the last session I mentioned that it's hard not to feel a lot of empathy for folks who try something and then it fails and they feel doomed. Keep it up, Indeed. Sometimes I've seen folks who do nothing more than CRA disputes finally get something deleted on the fourth or fifth try. Nothing works all the time. Now... about some FCRA street fighting...Let me throw out a variety of TRUTHFUL techniques for dealing with the lovely CRAs. "I don't understand why this appears on my report" I love that one. You profess to just not understand. "I'm so confused by what appears here. Please investigate this. It makes absolutely no sense to me." You aren't making any claim of "not mine" or "never late" (which would be lies unless, of course, they really aren't yours or weren't ever late... in which case... ok) You can write that in your own words a THOUSAND different ways. It IS the bureau's responsibility to provide you with explanations in plain English. You don't understand why it's there? Demand an explanation. Here's another technique that does NOT require prevarication. "Items which don't belong on a consumer's report violate federal law. Please investigate this item." Yes, that skates close to the edge. But preachy consumers aren't violating law. Along that line: "Dear bureau: Have you read the statistics regarding what percentage of reports include errors? This is a huge problem in our society. I don't appreciate it one bit. Please investigate the following items on my report."

That's the preachy approach. Preach and preach. But don't lie. I don't like the "Not mine" dispute for other reasons, and I'll mention those in a minute.

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Keep up the good work. You'll prevail eventually. Credit repair can test your patience, but the eventual rewards are good. Here's another credit bureau intervention... "Are you aware that reporting items late which were never late violates the law? Pursuant to my rights under federal law, I am requesting that you investigate the following account immediately, and if you find that you have included incorrect information, remove such data immediately. Please facilitate this lawful request within 30 days."

post-seminar note from PsychDoc: What I didn't realize was that everybody wasn't ok, although I realized that something was wrong... I continued merrily typing away... I wondered why nobody else was typing, lol... Then of course I realized that the chat room software had crashed... Unfortunately I didn't get to banter with Gryf regarding my contentions that sometimes credit repair interventions fail, that sometimes something will work for one person and not for another, and that one simply must dust oneself off and try again or try something else. Perhaps another day!

END CREDIT 105

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LESSON SIX TRANSCRIPT CREDIT 106: FCBA Street Fighting, 11/17/2005

Tonight we'll delve into the kinds of hardball tactics you can engage with creditors. Specifically, we're going to restrict ourselves tonight to those tradelines which may show late payments reporting to your credit reports but that never reached R9 or I9 status... i.e., they never, ever, charged-off or were listed as a collections accounts. Once again, I thought it would be useful to recognize the Creditboards Forum Leads and Mods... (in alphabetical order) cotterpin, CramItCCCAs, fla-tan, HDAlex, MarvBear, rigirl, TeeSharice, and TxQuiltGirl ... Once again, I hope I didn't leave somebody out. (LOL!) Anyway... The forum Moderator job requires so much... 1) Hard work. 2) No pay. 3) Knowledge. 4) Participation. 5) Willingness to play cop when "bad people" (and they know who they are) drift in like a bad log in a tide. If they weren't there, the boards would likely degenerate into a spam-filled morass where Viagra postings would surely outpace anything related to consumer credit by 10 to 1. ain't that the truth! LOL. So... we're all grateful, I think, for what they do here.

Tonight's syllabus...

-1-- Course overview and format (which we've already done) -2-- Brief review of the previous sessions -3-- FCBA brief -4-- Creditor motivation -5-- Creditor interventions -6-- Third-Party interventions

I taught developmental psych as a grad student back in the day, gotta have a syllabus. Now we delve into the material for tonight specifically... I want to differentiate tonight's credit repair interventions from next week's... Specifically...

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Next week we'll tackle collections and charge-offs -- in other words, those credit report items which are termed "R9" (for revolving chargeoffs) or "I9" (installment chargeoffs) by Equifax. Those kinds of tradelines fall under the purview of the Fair Debt Collections Practices Act (FDCPA)... and the primary credit repair intervention imposed for those types of accounts is termed "validation" which is the word actually used within that federal statute. TONIGHT however, we'll discuss those pesky accounts which never charged off but report nasty late pays... 30 day lates... 60s... 90s.. 120s... 150s... Anybody ever had any of those? smile.gif. Well... My entrance into credit repair occurred a half decade ago... (doesn't that make it sound longer than it was, ha) I was finishing up my doctorate, and I had lots of student loans... And I was late on all of them. Really late. Somehow I never let anything charge off. I knew very little about credit reports. My thinking was faulty... I thought, "What the heck, I'll pay them... so what if I'm late?" Then one day I got married, and my new wife and I decided to buy a car. Holy moly. Did I get an education that day? My credit was destroyed. So I started reading a bunch of credit repair books... and unfortunately they ... to borrow the language of people who are two decades younger than me (I'm 44)... those books SUCKED! They all said that if I paid off my debts I had no "leverage." (Which I don't believe, by the way, but I don't want to get ahead of myself.) So I went online and discovered the main credit repair discussion board on the net in 2000... and that was not the one some of you may be thinking of... it was a Yahoo discussion group... and they told me the same thing: "Oh man, you pay your debts... you have no leverage." Apparently "leverage" was reserved only for those who let things charge off... and then you negotiate the tradeline removal... according to them... and that's a fine technique by the way... we'll discuss that, among other tactics, next week... but that didn't help my situation... I was just a guy with a bunch of late pays... 30 days to 150s. To make this long story MUCH shorter...I did a lot of research and "adopted" some very fine teachers online and off... breeze is included in that category... and so was my brother, who was an attorney...There were others I'm leaving out...

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But the short of it is...a series of credit repair interventions was fashioned which would restore "leverage" to those of us who: 1) didn't want to lie, and 2) who paid the bills, and 3) whose credit was TERRIBLE These are the interventions we'll discuss tonight. They include: a) The Goodwill Letter (heavily influenced by marci, a Creditboards member); b) The Nutcase Series; c) The Dancerat letters (written by a member of another discussion board... Dancerat); d) The Knockout Letter (written by a very controversial fellow, but I've seen the results it gets). And there are others of course. There is a common thread to all of these direct-to-creditor interventions, and we'll discuss that shortly. I'll also post links to those letters...c) is cited on Creditboards btw, and perhaps d) too... but I didn't check. Let me cover the next topic on tonight's syllabus, CREDITOR MOTIVATION, and then we'll delve into the interventions themselves. Here are PsychDoc's Creditor Heuristics 1) Creditors are in business to loan money. 2) They don't want to fool with your credit problems. 3) They don't respect people with credit problems generally. 4) They wish you would go away. 5) They are highly motivated to avoid even the hint of litigation or embarrassment. Those five heuristics are key, lol. The jiu jitsu of dealing with creditors is to use their motivation to benefit YOU. So... First, the classic "Goodwill" approach... Essentially, some creditors, if approached on the right day, and if the right representative is engaged, will forgive a negative credit report listing just because. I would like to say... "just because they value your business"... but I think it's simply "just because"...The approach simply involves this... Saying your sorry. Saying you won't do it again. Saying you had a bad moment. Asking if

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there is redemption in this lifetime at Sears. Has anybody had success yet using the Goodwill approach? Some yesses and some no's. It's a great way to start. So nibanike... you actually saw success with 2 90 day lates using Goodwill? That's fantastic... Very nice, tagalong...For those who have not succeeded (yet), be persistent... use a variety of approaches... I think wayhigh is correct... and I also think that -- typically -- the less severe the item, the more likely the success... although as we've seen here tonight... even severe tradelines can give way. There is a "classic" goodwill example that I'm sure is posted to Creditboards. You can and SHOULD change that a bit to fit your situation, your explanation, etc. The next credit repair intervention for late-pay creditors is... the Nutcase series. I'm intimately familiar with that one, lol...Let me say, first, what it ISN'T... A CBer posted this... (and I like this CBer... so don't take this out of context)... "So the nutcase letter is basically an ITS with a foaming-at-the-mouth rabid tone, spouting whatever the CBer can come up with that's close to a legal theory that might fly (in the Bizarro World)." WRONG. LOL. Maybe somebody's generic nutcase letter is that... and I'll bet that's what he's referencing. But there is a specific series of letters that we "named"... just so we'd have a convenient moniker. Really, the Nutcase series uses non-angry language. Very matter-offact. It asks the creditors to verify this and that. And this and that. And this over here and that over there. And, oh by the way, if you can't comply with these lawful requests, then delete the tradeline. It looks a lot like "OC validation," i.e., validation letters sent to creditors... but it's not that... because those are usually tried in order to attempt forgiveness of an allegedly outstanding debt. Sometimes the entire tradeline is removed...I have a personal philosophy about that... Some people cry (and they're right in one respect)... "TAKING THE TL AWAY ENTIRELY IS WORSE THAN LEAVING IT BECAUSE OF MY CREDIT SCORE" etc. I think that's a respectable argument, and it's certainly true that an established account with a high line of credit adds points to credit scores. But... If you want a CLEAN slate (because mortgage brokers will give you sheer hell even when they see even a 30 day late or whatever), etc., then I'm all for just starting fresh. With my personal credit repair I didn't care whether it was removed

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entirely or if just the negative portion was removed. I wanted a clean slate. Sure, your score may dive at first, but it's like psychotherapy... LOL. Sometimes you get a bit worse before you get better. You build your credit, and your scores rise precipitously. It's all about your goals. Keep in mind that the nutcase series of letters is aimed at forcing a fully paid creditor to demonstrate that the late-pay notations in your credit file are: a) proveably correct; b) don't violate your civil rights; c) weren't associated with an "encumbered" consumer protection issue, and d) don't reference a transaction that was part of a problematic insurance dispute (with all the laws pertaining to that), among other things. This differs TREMENDOUSLY from a standard validation letter for unpaid [alleged] debts, since that standard validation letter is asking for one thing -- proof that the debt existed. The nutcase series DOESN'T DISPUTE the original debt's validity at all. The nutcase letters dispute the validity of the NEGATIVE TRADELINE REMARKS and do that by hinting at one or more violations of consumer protection laws. It is a perfectly legal letter whose object is not to present as a psychotic (as some people seem to think, lol) but rather to present as a litigious nutcase who is "up to something" and who should be dismissed as cheaply as possible and quickly (by deleting the negative tradeline notations, hopefully, lol). So... There is actually a series of them...Here is a link...

http://www.psychology.net/credit/nutcase.txt

A few words about when to use Goodwill versus Nutcase... There's no rule of course, but typically: -- Goodwill letters work best with fully-paid, still-open accounts with isolated and relatively minor late-pay notations. Now, of course, we've seen people have success using this technique with seriously-late and paid/closed accounts as well (hence, the "no rule" caveat, lol). Regardless, if you've had a Sears account for 7

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years, and you were late twice three years ago, I certainly wouldn't send the "nutcase" for that because: 1) you currently have a relationship with the creditor, and 2) an isolated example within the context of a valued customer's otherwise excellent account history really beckons for a "courtesy adjustment" rather than the implied threat of a lawsuit. While... -- Nutcase letters work best with paid/closed accounts for which there was serious delinquency one or more times. So, for example, with my PHEAA student loans, I was 150 days late several different times over a period of several years. (Basically, I wouldn't pay for 4 or 5 months and then I would make a big lump payment to bring it current. I was destroying my credit and didn't even know enough about CRAs to know it at the time.) In that case, asking for a "courtesy adjustment" seems like a pretty huge stretch even for the most kind-hearted customer service employee. So I went with the Nutcase letter and they folded quickly. If there is a heuristic in here somewhere, maybe it goes like this: There's lots of overlap, and only you can be the judge, but typically a "courtesy adjustment request" (Goodwill letter) stands a better chance if the delinquency occurred within the context of a properly-maintained account -- as wayhigh said before here. That said... We have seen lots of good responses for Nutcase with charged-off accounts when sent to original creditors. That's not how the intervention was designed... so your mileage may vary. Again... my mantra... 1) PERSISTENCE... 2) A VARIETY OF APPROACHES... 3) REPETITION... 4) PATIENCE Next intervention... FCBA... The Fair Credit Billing Act requires creditors to bill correctly and completely. Quoting from the second session of this series... "The FTC summarizes the statute's prohibitions as follows: "unauthorized charges; charges that list the wrong date or amount; charges for goods and services you didn't accept or weren't delivered as agreed; math errors; failure to post payments and other credits, such as returns; failure to send bills to your current address -- provided the creditor receives your change of address, in writing, at least 20 days before the billing period ends; and charges for which you

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ask for an explanation or written proof of purchase along with a claimed error or request for clarification." Some may remember that in an earlier lesson I briefly mentioned one proposed FCBA intervention... "In accordance with my Federal civil rights as stipulated by the Fair Credit Billing Act, you are obligated to comply with this lawful request for elaborated documentation for billing, including charges and interest, as well as a full accounting of where each bill was mailed, for the life of the account, or rescind these reports from every consumer reporting agency to which you have reported same. Your expeditious handling of this matter is expected." So, regarding the FCBA, you want to ensure the following before ANYTHING is reported to the bureaus... 1) The account was created at your request. 2) Every item billed to an account was billed correctly. 3) Every statement was created in a timely manner. 4) Every statement was sent to the correct address. 5) The creditor never ignored your change of address requests. 6) The creditor never ignored disputed charges. 7) Ignored change of address requests, or disputed charges which weren't facilitated correctly and in accordance with your rights as stipulated by the statute, didn't contribute to negative credit bureau reporting. 8) Interest and late fees were computed in accordance with federal law and with any laws specific to your home state. 9) The creditor didn't break their contract with their customers in any way. So... lol... Consider this FCBA based credit repair approach... "Dear XYZ, The Fair Credit Billing Act requires that you bill correctly, that each statement be sent to the correct address, that you not ignore change of address requests, and that you facilitate disputed charges in a manner prescribed by law. The Act also stipulates that you provide lawfully requested information concerning my account upon request in a timely manner. For that reason, forward a notarized statement on your letterhead which will attest to your compliance to the FCBA generally and to my account specifically throughout the

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period I have been a customer. Otherwise, delete the negative marks you have reported to the three consumer reporting agencies within the timely manner prescribed by law. Your prompt attention will be appreciated." Remember my Creditor Heuristics... Anything that smacks of possible litigation makes creditors nervous. They just don't want to fool with you. They'd rather go attend to their business. A polite, calm, lawful request just gives 'em the willies. Keep in mind that these sample FCBA approaches, like the Nutcase approach (especially Nutcase letter 1)... make no claims. They just look like they're written by somebody who calmly has it together and is about to escalate. Yes, 4myfuture, definitely. Yes... but you should also leverage HIPPA there. gmta clouds, lol interesting, tagalong, more grist for the fire you'll set... The NEXT creditor intervention in this vein is the Dancerat approach. Dancerat was a participant on another board. I don't think he or she ever registered on Creditboards, but I could be wrong. But Dancerat used a different tactic. Unlike the Nutcase series... and unlike the FCBA approaches mentioned here... (and for that matter unlike the FCRA "prove it or lose it" approach I've described in previous sessions for credit bureaus)... Dancerat DOES make a claim. The Dancerat approach actually disputes certain aspects of the underlying debt, so this should be used carefully. Remember my byword: tell the truth.

Unlike the Nutcase series and Bauer's Knockout tactic which do not disclaim the original underlying debt, the DanceRat approach uses a "not mine" claim. Here is a link to the text for that interesting direct-to-creditor approach. http://www.psychology.net/credit/dancerat.txt Next I want to mention another one that has achieved excellent results for many on the net. Dare I say the name... Bill Bauer? (OH NO... I'm being chased away.) Very good, I'll not review the history, ha. Bill is a cantankerous old coot. And I say that affectionately. Some dislike him. Others don't. But he wrote a VERY good direct-to-creditor intervention, and released it to the internet gratis -- which is

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unusual for him. He called it the "Knockout Letter". It's something like the Nutcase series in that it DOESN'T make a claim. (So in that regard it's diametrically opposite to the method Dancerat utilized.) Here's a link to the text for that: http://www.psychology.net/credit/knockout.txt The thread that connects all of these is... (and I hope someone here invents the next super intervention... the more, the better for all consumers) that they make a request for ACTION or DELETION. They may mention various laws... or even aspects of various laws... Some make a claim (i.e., "I was NOT LATE"), and some don't (i.e., "prove to me you have complied with the law; otherwise delete"). It really doesn't matter what silly names we've given to these different categories because YOU can write one even better. It pays to know the laws, of course... REVIEW the second lesson of this series... But after you have become familiar with the various consumer protection statutes... you'll be in a terrific position to improve upon these, or even trash them, lol, or come up with your own unique approach. The division between... a) making a claim... versus b} not making a claim ... will remain of course. You have to decide what you're comfortable with. Ok... checking my syllabus... lol..see it's really for me to keep me on track heh ain't that the truth breeze, I've told a couple here, argh... Well... we've covered the direct-to-creditor interventions... And I've given you a sense of how they divide themselves into the two categories... And some examples you can use... Now I'd like to move to the last item on tonight's list of topics... which is... Third-Party Interventions. This is where you essentially do what we shrinks always advise people not to do in their families... lol: TRIANGULATE. Typically, creditors don't want to be embarrassed... They HATE it when consumers complain to... 1) the Federal Trade Commission... 2) The Better Business Bureau... and ... 3) Consumer web sites like PlanetFeedback.com (which I understand is back after a brief hiatus). Has anybody ever seen good results (or bad) from using third-party interventions? do tell, zappagal (VERY GOOD... that's right... perhaps the best third-party intervention would be a letter to your state Attorney General!)

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wayhigh: I'm not recommending or not recommending any of these... and yes, you should assess your risk... The Knockout Letter is typically "Bill"... i.e., contentious. That's why I prefer the Nutcase series (and you knew I'd say that). I prefer polite, but the Knockout Letter has netted great results as well. It's one more arrow in the sling. So, again, a VARIETY of approaches may be what it takes over the course of a year. Very good, zappagal. Ok, let me just end by encouraging everyone to search Creditboards for references to these interventions... both the direct-to-creditor ones and the third-party ones. With respect to the third-party interventions, sometimes it's best to learn about those just by reading the anecdotes posted to the board. Let me also encourage everyone to post about their successes and otherwise, so that others will be able to benefit from your experience. In two weeks... We will dip into VALIDATION, chargeoffs, collections, and some of the peculiarities of the FDCPA. smile.gif I think we can all be grateful for this wonderful community. wayhigh... lots of debate about that... For Nutcase, I love CMRRR, and I love NOTARIZED signatures because they spook creditors, LOL. It looks like a polite document that your lawyer prepared... ...but nothing's "required." Try it one way, then try it another. You'll see the gurus taking positions on all of that -- whether it should be CMRRR... or whether it should it be typed... or whether it should be handwritten... or sent with purple ink... etc. Lots of very smart people have opinions about all of that, and I'm not taking anything away from them by the way... Some make great points. I've just seen positive and negative results from just about every combination, so I'm not one who offers that kind of advice. tagalong... student loan guarantors are like most other creditors... What works for one sometimes doesn't work for another, so just delve in. I wish there was a "right" answer. walkingthemaze put it just right Buck, I've seen success both ways. Definitely work the contacts if you have them. The legal counsel at Citibank once removed a bad student loan tl for me when the customer service reps said "no way" "1-2 Punch" next session -- it's a variant on validation.

END CREDIT 106

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LESSON SEVEN TRANSCRIPT CREDIT 107: FDCPA Street Fighting, 12/1/2005

Tonight we'll delve into dealing with some of the nastiest people on planet earth. And I understand they're pretty nasty on that other planet too... (and perhaps there are a few nice ones...) talking about debt collectors. Tonight's syllabus... -1-- Course overview and format (which we've already done) -2-- Brief review of the previous sessions -3-- FDCPA brief -4-- What is validation? -5-- The sequence -6-- Controversy abounds Well... as I hope everyone knows... collection agencies and their employees are regulated by a federal statute -- The Fair Debt Collection Practices Act. That law was enacted in order to protect all of us. And the REASON it was enacted was because debt collectors did (and still do, unfortunately) demonstrate questionable business practices. Until the FDCPA became law, debt collectors could call you on the telephone anytime they liked. They could threaten all kinds of legal action, some of which they weren't actually entitled to pursue. They would threaten "debtor's jail" (something that doesn't exist in the United States) (but don't travel to Uruguay!) They would telephone relatives, bosses, friends and embarrass the alleged debtor. So Congress passed the FDCPA in order to stem such practices and to give consumers some teeth. As we discussed in Lesson 2... The FDCPA in a nutshell... 1) Provides behavioral standards for acceptible third-party collections behavior. 2) Specifies that CAs must always include several legal caveats in their dealings with debtors. (Before, CAs would employ all kinds of shenanigans to mislead consumers regarding who they were.)

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3) Allows the debtor to formally request (i.e., by letter -- hopefully certified and sent with return-receipt requested) that the CA "cease and desist" from communicating with the debtor further. 4) Specifically details a consumer's right to request further information regarding an alleged debt... Among other rights. I would specifically recommend that anyone who is being pursued by collection agencies (CAs) read the act. Has anyone actually read all or part of the FDCPA? some yes, some no... it can be confusing... I hope tonight that we'll delve in and give some shape to the material so that you'll be less confused! Since we're talking about actually READING the Act... LOL... I hate to give homework... but I heartily recommend it...Let me help those who've not read it at least join the group who've read parts of it...here's a link... http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm Read it tonight or tomorrow, LOL. Note especially certain sections...let me help those who haven't read it at all... annotate the Act a bit Collectors can't call after 9 pm or before 8 a.m., That's YOUR local time, by the way. Look for that in this section... FDCPA 805 (a)(1). Collectors can't telephone you at work if you tell them not to... Look for that in this section... FDCPA 805 (a)(3) Collectors should NOT give information about you to third-parties (friends, family, coworkers, etc.), and that's here: FDCPA 805 Also, there are some FTC Opinion Letters which underscore that... These do not carry the force of law, but they have proven to be quite influential with most judges in courtrooms as evidence... LaScuola, Halverson, Jones, Borowski, Zbrzeznj, Fisher, Atteberry, Kwait. (Those are the names of the FTC Opinion Letters.) By the way, has anyone ever come across or referenced FTC Opinion Letters? They're found at the FTC site. Great, a few people. Some not... Ok... I'll cite a few more for the transcript. Here's a good FDCPA citation... If you inform a CA that you no longer want them to contact you, they cannot. But note the following

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CAVEAT>>>Most informed folks will serve up the excellent recommendation that you only inform them not to telephone you. So that's why many of us don't recommend telling them not to WRITE you. The FDCPA citation for that consumer right is HERE >>> FDCPA 805 ... You'll find an excellent Cease & Desist example on Creditboards in the letter archive. By the way, there's so much material that I hate to gloss over (but this is a beginner's course)... but let me reiterate something anyway... CEASE & DESIST can be very powerful. Many CAs will oblige. And the ones who don't... can be sued... with a $1000 statutory award for every infraction. There are 46 folks in the room, and we won't cover small claims this time... Citation... FDCPA 806 and FDCPA 807 give you specific rights against other abuses. Threats, etc. Ok, moving along in the syllabus... We've reviewed the major sections of the FDCPA and provided specific citations for you to review. Next... "What is validation?" Let me start by describing a scenario. I knock on your door. At your house. "Hi, I'm Randy Padawer with the Randy Padawer Collection Agency." "And you owe me $500." "And if you don't pay, I'm going to ruin your credit." The door slam is one thing. You want to know who I am. You want to know that I actually own the debt I claim I do. You want to know that you actually incurred the debt once upon a time. You want to know what that $500 is about... because the only Sears debt you ever owed was for a third of that. So the FDCPA accords you the right to information. Now, let me clarify a few things. Some people say flatly... "You can only request that information within 30 days." Before I go into this, I want you to jot this down... 1691g from the FDCPA: "The failure of a consumer to dispute the validity of a debt under this section may not be construed by any court as an admission of liability by the consumer." In other words, just because you FAIL to dispute the debt within the 30 days doesn't mean you have resigned yourself to whatever they say. We don't quote that enough. We roll over. And sometimes our experts roll over with 'em. Now, having said that, let me backtrack a bit. The FDCPA says...

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"If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) of this section that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof until the debt collector obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector." That's where the 30-day clock reference originates within the act. Note that it doesn't say anything about validation. In fact, the word "validation" only appears TWICE in the Act... in the table of contents... and as a section header. You can request validation at any time. That's your consumer right. Now... Will a judge stand behind you? Sometimes yes, and sometimes no. Some judges will cite the 30-day thing (in error, I think) and some won't. Some judges despise debt collectors. But no law limits your ability to request information. AGAIN... YOU MAY NOT PREVAIL IN COURT. BUT YOU MAY. In any case, a request for validation sometimes results in a consumer-friendly response no matter when it was sent. Question... Has anyone here ever had a tradeline wiped off a credit report, or an alleged debt removed, in response to a request for validation (irrespective of when the letter was sent)? I want those who read this transcript in the future to be encouraged. Like every credit repair intervention cited so far, sometimes it works, and sometimes it doesn't. But let me say this... If you are outside the 30-day initial collection period, don't let that dissuade you from pursuing the other side vigorously if that's what you need to do. Because, as we've seen in this transcript tonight, sometimes it works and sometimes it doesn't... and that's irrespective of that 30-day period. Results matter. Now... if you're looking for slam-dunk court case, then, yes, if you've pursued it within the 30 days, you're in a MUCH more powerful position. Regardless, if you're looking for a clean report... you should be encouraged. It can work. The operant word there is "can.". Now... let me move onto another point of interest. Here's another one for Gryf's notes, LOL... A

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validation letter is not a dispute. It is a request for information. You don't know whether or not you are going to dispute the debt because you don't know if you owe it yet. You're saying, simply, "excuse me, I've never had an account with ABC Collections... I don't know you... Please identify yourself better and tell me about this alleged debt. Otherwise lose it and remove it. Thank you." That is not a dispute. The dispute comes AFTER. Just because you have requested validation doesn't mean you have disputed anything, Yet. On a related note, tonight I'd like to do something exciting, LOL... I *NEVER* have said anything like that in the first six lessons... I hate hype. But this is exciting. The exciting thing is this... a new court case... October 17, 2005... Southern District of Indiana, Recker v Central Collection Bureau, Inc. Here's the gist... A debt collector who simultaneously verifies and resumes collection activity violates FDCPA. Timing becomes central. In other words, a court has affirmed that validation is a separate event from the debt collection period. This is too new for me to elaborate HOW we will benefit, but we WILL. And, I hope you'll find it and read it. And post it to Creditboards. That means... If the collector sends what they consider is verification (and THAT's the word used within the paragraph under the Validation heading, by the way... PLEASE never get caught up with people who want to argue those two words with you... it's a time-waster)... anyway, if the collector validates or verifies or sends adequate smokes signals, etc., and at the same time says, "NOW YOU MUST PAY" in the same letter or if they do ANYTHING during that period that smacks of collection, you have a case law citation to present in another court... or... you have a nifty citation to reference in your next letter to them. Please consult with your attorney if needed, since I am not one, and this is not one-on-one legal advice. Also, please do your due diligence regarding research... ask your friends on the board before citing any case law (or statute for that matter). Now, let me reference TWO MORE laws that many of you know well. The first one is one we like, and the second one is one we don't, LOL. First... Spears v. Brennan 49A02-0003-CV-169, Spears was a mixed case, although it was settled MOSTLY in favor of the consumer. We like it

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because... The signed contract is not enough. It merely shows the presence of an original agreement. It doesn't prove that the customer still owed money. The second citation seems to refute that, but I'd like to delve in a bit there too, and that one is indeed Chaudhry v Gallerizo. By the way, when you search the board for Chaudhry... also search it for the misspelling Chaudry... people always leave off the second "h" but you may overlook some very good information, so search both ways. As you see, they LOVE to cite Chaudhry because they CLAIM that this case TRUMPS federal law. In other words, they say that since a section of Chaudhry says that a simple note that the consumer owes "this much" is enough information in response to a validation request... that must mean that the FDCPA (a FEDERAL statutes) has been overturned. Now isn't that crap? LOL. Plus...By the way, that's Chaudhry v. Gallerizzo, 174 F.3d 394 (4th Cir. 1999). Anyway... Plus, when you read Chaudhry, you'll see that the CA had already sent some information. They actually sent what some of you hope you never see.... which is... a lot of substantiation. The consumer pressed it. And the CA responded with just a note the next time. And the consumer pressed it again, took 'em to court and lost. The citation about the single line being enough is... TAKEN OUT OF CONTEXT. (Ditto re: WhyChat's analysis.) So YOU have the right to snap right back at 'em with that. Plus...let me be clear... The CA in that case provided a bunch of validating information. It was the SECOND PASS where they provided a "look, we're fed up and want our money" note. The case itself was about something specific.... plus, as you just mentioned...if you don't happen to live in the 4th District, it's not the law of the land EVEN IF your situation was EXACTLY as Mr. Chaudhry's. So don't let them cow you with Chaudhry. So don't let the validation-debaters cow you with the 30-day warning. You just go, go, go. You do not give up any right when you request information. Again, you may not win in court. But, then again, most of you won't go to court. Most are interested in clean credit reports. And of those who do go to court, you MAY win! Ok... Moving on... I want to list some FTC Opinion Letter names for your reference that discuss CAs who refuse to validate... Mezines, Cass, Berger, Bergstrom, Castle, Miller, Wollman, Krisor... You've got some homework now,

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LOL! There's obviously not time to discuss every one... Now... About collectors who threaten to sue you outside of where you now live or where you lived when you incurred the ORIGINAL debt (which is a no-no, by the way): Reference FDCPA 811 (a) (2). Also reference this excellent case citation... Yu v. Signet Bank, California Court of Appeal, First Appellate District, Division Four, 69 Cal. App. 4th 1377, decided 02-16-1999. And this FTC Opinion Letter... In other words, if you incurred the debt when you lived in Kentucky... and now you live in Minnesota... and the CA is in Kansas... that CA better not try to sue you in Kansas. They'll need to file in either Kentucky or Minnesota. Otherwise they are SCREWING with your civil rights. I hope this is helpful so far...During tonight's seminar, you've been provided serious annotations from the FDCPA... Also references to some very relevant FTC Opinion Letters... Also, some good cases (and of course there are lots lots lots more for those who want to delve in) to cite... Also, some encouragement regarding pursuing CAs... irrespective of the calendar. Also, some testimonials within this transcript from those who confirm that opinion vis-a-vis credit report results. And finally, you've been reminded that a request for validation is not the same as a debt dispute. So.. Now I'd like to turn to the SEQUENCE, which is the next item on our syllabus...Basically, beginners will hear a bunch of stuff... terms... like... validation, verification (and people killing each other over those words, lol)... etc. Let me just provide an oversimplified sequence for newcomers... 1) You request validation of a debt. 2) They either send you something or not from a debt collector Courts have not yet defined exactly what constitutes good validation. This works in your favor. You are not obligated to be satisfied with what they send, LOL. Of course, you can be satisfied if you want to be! Basically, you want a lot of information. Now... sometimes you have to be realistic about how far you want to pursue this... whether you will go to court or not... when to hold 'em... when to fold 'em (anybody care to sing?) If you contend that they haven't provided proof of the debt... you can contend that they have violated the law by continuing to collect... If the debt is small, most CAs would rather just move along to the next 59

person who will wither and cry on the phone rather than deal with a troublemaking citizen who knows their rights. Now, if it's a $32,000 alleged debt to Citibank, you can bet that they're going to pursue you if you owe the debt! We've known one or two charlatans in our community who've made a job out of cheating creditors, suing them, sometimes winning, and bragging about it. Let's not name names. Please. But... That is certainly not the way I would recommend you live your life. I guess that's enough to say about that. Each state establishes their own guidelines with respect to when a debt is no longer collectable (i.e., the statute of limitations). A SOL doesn't prevent someone from attempting to collect. The SOL simply provides you with what's called an "AFFIRMATIVE DEFENSE". That means... They can continue to collect. You go to court. They say, "Judge, he or she owes me this money." And you say, "Judge, before this matter proceeds further, please know that I have an affirmative defense regarding the statute of limitations of this debt, in accordance with the law of this state." That is an affirmative defense. They can collect. They can sue. And if YOU don't assert your affirmative defense... the judge may not do it for you (he may, or may not)... The validation process is separate from their collection activity. Much more for everyone to discuss on the board. Ok... back to sequence... 1) You request validation... 2) They respond... 3) You send an "estoppel" letter... 4) They respond... 5) You send an "intent to sue" letter. Now, keep in mind, this sequence isn't the "only way" or the "right way"... It's just a way that has benefitted many I know... but... You may see other sequences that may be better for certain (or many) situations. Now, on to the difference between estoppel and intent-to-sue... Estoppel references an old English common law practice. The word is actually used in several contexts, I understand... (and again, let me reiterate my non-lawyer status)... but in our context we talk about "estoppel by silence"... In other words, the CA failed to provide validation, which is "silence" even if it was a frivolous response.

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By their "silence," they are essentially admitting an inability to fulfill the lawful request. So, you're saying, "Hey, I asked for proof of this debt. I'm willing to pay any debt I owe, but you haven't shown that I owe this... and we know how debt collectors are... which is why consumers are protected... So... you must stop." That's estoppel in a nutshell. It's just the next letter in a sequence that can be effective with a CA who is sick of fooling with you. (And who may worry that you are a litigious crazyperson who'll drag 'em into court, which they may not want to do even if they think they'd win.) First, validation, then estoppel, then the intentto-sue letter. You can find all of these letters I believe on Creditboards -- and certainly lots of references to them. Keep in mind that they don't mind being a nuisance. You don't have to be more polite than them. You be a nuisance too. Now to the last topic on our syllabus... -6-- Controversy abounds. Probably NOTHING inspires more debate in our wonderful consumer advocacy community than the things I have dared to discuss tonight, LOL. People will argue, as I said, about whether CAs validate or verify, or if OCs validate or verify, etc. Some of the people arguing I respect VERY much. I just prefer not to get into that. I would recommend that you search the board for "reaging" and "re-aging". As we've seen, the FDCPA references "verification" within the Act. There are clear rules about it. Now, another controversy... I have seen posts on various discussion boards on the net where the person gives a play-by-play about what constitutes a validation letter... and they instruct everyone that a validation letter must include a debt dispute. ARGH. Of course, you *could* do that. But you're doing too things at once. You're saying, "please prove this to me" and "this is definitely not mine" at the same time! If you know for a fact that something is definitely not yours, then there's no need to ask for proof. It matters because of that 30-day reference. The FDCPA says you must "dispute" the debt within 30 days of first collection. Now, again, it gives quite a lot back when it says that if a consumer doesn't do that, then they're not necessarily giving up their right to assert that the debt isn't theirs. So that seeming contradiction keeps the courtrooms busy... and keeps the debaters on the board debating... but... if you understand that a validation request is not a

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dispute, then, in the words of some lawyers I respect, you skirt the issue altogether. They come back and say, "Nah, nah, you didn't dispute this within 30 days..." and you ... 1) cite the FDCPA reference that says that you don't have to roll over and 2) you say, plus, I haven't disputed anything... I'm issuing a lawful request for information... proof... competent validation... You just keep hammering them. (If that's what you want to do.) Ok... I am going to do something I regret... It's soooooo late.... We've gone over by almost an hour, and amazingly almost everyone has remained! So I thank you for that. I hope tonight was helpful. We've covered the syallbus.

END CREDIT 107

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LESSON SIX TRANSCRIPT CREDIT 108

This is the last of our series. For those who are showing up for the first time tonight, I really want to give a caveat... You probably will never need to file a lawsuit... and that's the topic of this last seminar of the series. I really don't want the newest newcomer to get the idea that we're all about lawsuits here. You can literally clean up "impossible" credit reports and never set foot in a courtroom. If you'll keep that in mind, I'll feel a bit more comfortable proceeding. Tonight's session is the third of the second group. Tonight's syllabus... -1-- Course overview and format (which we've already done) -2-- Brief review of the previous sessions -3-- Being litigious -4-- Types of "credit repair" lawsuits -5-- Collecting evidence -6-- The small claims process -7-- My complaint letter example I'll draw from my own experience... Some of my fellow old-timers remember a half-decade ago when I successfully sued the three credit bureaus. More about that shortly. On to the meat of tonight's syllabus... -3-- Being litigious, I'd like you to develop a mindset... even if you never go to court... a litigious mindset... Now... some people mistakenly believe that "being litigious" means turning into your grumpy Uncle Abe who yelled at everybody. Fortunately (or not, if you enjoy screaming), that's not the way to be. Think in terms of a lawyer in a courtroom who calmly states his or her case with deadly seriousness and then sits down. Think like the detective who deliberately collects evidence. Your evidence are the letters you send and receive. Your credit reports. And perhaps even tapes of certain telephone conversations (in cases involving CAs who call you before you send a cease & desist). Screaming, yelling, cursing, slamming the phone, threatening, etc., may make you feel

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powerful. But it probably will do nothing to assist your case. In fact, we'll talk a bit tonight about how "playing dumb" sometimes entices the other side to break the law (their fault, make no mistake). Now, that said, let me reassert the message from Session One... Be honest. Never misrepresent. On to the various types of credit repair lawsuits. But first... Let me throw out a question... I realize this is a seminar for beginners... but we welcome the experience and wisdom of those who've ran around the track a few times already too... Has anyone here ever filed a lawsuit against a credit bureau, a creditor, or a collection agency? many no's of course... Would you be willing to tell us about it (if you can) with just a few summary sentences? very good... when the other side doesn't show, the plaintiff (you) get awarded what's called a "default judgment", Here are some common violations directed toward credit bureaus (and of course there are others): -- FCRA violation: not properly verified the debts as valid within the reasonable time period prescribed by statute -- FCRA violation: tradeline verification despite proof that such verification is impossible ... by the way, that "reasonable time period" has been held by courts to be 30 days... the final transcript will be cleaned up some so folks don't have to jump around to follow ok, more common violations directed toward credit bureaus. -- FCRA violation: insufficient and incomplete investigation (keep in mind these are things you can sue over) -- FCRA violation: failure to provide information regarding an investigation pursuant to 611(a)(3)( C) -- FCRA violation: failure to provide the requisite notice regarding an investigation's procedural and contact information pursuant to 611(a)(6)(B)(iii) let me retype the end there pursuant to 611(a)(6)( B )(iii) -- FCRA violation: willful noncompliance with the Act That one's a very general one. It's nice to stick onto a lawsuit. Basically, if a credit bureau demonstrates a pattern of neglecting to comply with the law, one presumes that they are DELIBERATELY doing wrong. The next two lawsuit complaints directed toward CRAs aren't specific to the FCRA... that's this one...

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-- FCRA violation: failure to provide information regarding an investigation pursuant to 611(a)(3)( C ) ok, these next two aren't FCRA-specific -- Defamation of character -- Negligent enablement of identity theft Basically, if they say nasty things about you (like you don't pay your bills on time), then they are defaming your character by definition... and especially so if they have made an error. Remember our message from the FCRA Street Fighting seminar... Credit bureaus enjoy no governmentally sanctioned "official" status. Rather, they are privately owned (except for Equifax which is publicly traded... but still owned by its shareholders) entities whose primary business is to buy and sell information (i.e., gossip) about you and me.I'm no lawyer. So this is a good moment to reiterate that... and also to plug the board here which is filled with folks who stand ready to discuss every topic, LOL. :) More seriously, if a CA calls you at 2 in the morning for 17 days in a row, that would indeed be 17 violations... with a statutory award of $1000 per which brings us to the next list... common violations directed toward collection agencies (CAs)... (and again, there are certainly others): -- FDCPA violation: telephone contact despite a lawful cease and desist notice Right, the statutory award doesn't preclude additional damages. We sometimes see lawyers in our Creditboards community... Do we have one in the room tonight? (Wouldn't that be handy, LOL?) -- FCRA violation: failure to provide information regarding an investigation pursuant to 611(a)(3)( C ) now that's for credit bureaus..I'll continue listing potential violations for CAs next (not inclusive) -- FDCPA violation: harassment or abuse (pursuant to 15 USC 1692 d ) -- FDCPA violation: actual or implied threat -- FDCPA violation: insufficient and incomplete validation -- FDCPA violation: continued collection activity during period of validation or dispute By the way... the case cited last week... Recker v Central Collection Bureau, Inc. ... provides additional ammo for this one

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-- FDCPA violation: communication with third parties (pursuant to 15 USC 1692 c ) -- FDCPA violation: false or misleading representations (pursuant to 15 USC 1692 e ) -- FDCPA violation: unfair practices (pursuant to 15 USC 1692 f ) -- FDCPA violation: willful noncompliance with the Act (this last one much like the FCRA one referenced for bureaus above) gotta love the "willful noncompliance" and, again... LOL -- Defamation of character although that may be less strong with CAs... in cases where they are only communicating with you ... but coupled with -- FDCPA violation: communication with third parties (pursuant to 15 USC 1692 c ) the "defamation of character" complaint can have teeth. Well, in the case of CAs... if a CA manages to let your boss or a neighbor (or whoever) know who they are and why they're calling you then they have not only violated the FDCPA but, if they cannot provide adequate validation, then they have essentially told an untruth about you i.e., they have defamed your character. Usually, when one files a lawsuit against a CA, it lists multiple violations if there are more than one. That's also true for CRAs. When I sued the bureaus... and you'll see my sample complaint shortly... I listed multiple violations on the same suit.When it comes to a credit report, it's the CRA who defames you if they sell the erroneous information to others... despite your assertion that the information is wrong (and if it is indeed wrong) his question... if the CA reports incorrectly to three bureaus, does that constitute three separate violations at $1000 a pop? very good.. Ok, to continue... common violations directed toward OCs (again, not all-encompassing): -- FCRA violation: credit report accessed sans permissible purpose (this refers to when a company puts an inquiry on your credit report without any permissable purpose) (i.e., they can't show that you applied for credit, employment, insurance, etc., and neither do they have a prior relationship with you) Just for the sake of covering the material that isn't beyond my expertise, LOL, let's defer questions just a bit for the moment...

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-- FACTA violation: reporting incomplete, innacurrate, or otherwise erroneous data to a consumer reporting agency -- FCBA: incorrect or untimely billing (within 30 days of statement receipt) -- FCBA: refusal to provide lawfully requested account information and once again... -- FCBA or FCRA or FACTA violation: willful noncompliance with the [Name of] Act

I wanted to mention a special case... Sometimes newcomers will see someone refer to the "1-2 Punch".. Basically, here's how that works. When a consumer requests validation regarding an alleged debt... the CA cannot continue what's termed "collection activity"... which includes reporting to bureaus.. if they do, they've violated the FDCPA so... The "1-2" part of the "punch" works this way 1... you request validation 2... when you're sure they've received your lawful request you immediately dispute with the bureau. If the CA "verifies" the account during the period they're supposed to be gathering the validation materials for you, they've violated the Act. Some people believe that testing the limits of a CA's compliance isn't ethical. I have an opinion... for what it's worth.. ... I believe that nothing limits a consumer's nuisance quotient. Irrespective of whatever letters you write, a CA has a duty to abide by the principal federal statute that regulates their profession. We've seen good results with the 1-2 Punch. Timing is everything there. It may be worth a try. Keep in mind that even if your goal isn't to collect damages (and mine wasn't... my goal was simply to clean up my reports) you can "collect your evidence"... line your ducks up... and use an "intent to sue" letter (search the board for good examples) to net a CRA deletion. You want to send that CRA dispute within just a few days of their receipt of the validation request.. Ok...About the next item on tonight's syllabus... -5-- Collecting evidence oops... let me mention one other special case... it was listed above briefly this business of inquiries and what the FCRA terms "permissable purpose"... It's the creditor's responsibility to demonstrate that they

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had "permissable purpose" Think of it this way... permissable purpose" only refers to companies which take a look at your report as with inquiries Let's say there's a Verizon inquiry on your report. You don't have a Verizon cell phone. You don't remember telling them to pull your credit when you had that conversation with the salesman. (Did your spouse hand over your SSN?) It's Verizon's job to demonstrate that they did indeed have permissable purpose. If they can't, you may have excellent leverage for crafting a letter... especially one of the strong "intent to sue" varieties (again, search the board for examples) and netting a deletion of the inquiry... And if you like the courtroom... You may be able to settle for the $1000 statutory award. Ok, I'm going to move forward -5-- Collecting evidence.. Basically, everything you do in credit repair is evidence. Your requests for information from OCs or CAs... Your request for information (or outright disputes) directed toward CRAs...evidence your concern that you may have been damaged in some way. Their responses constitute evidence. Let me do all caps for just a moment. (something I'm usually loathe to do):) NEVER THROW ANYTHING AWAY WHILE YOU'RE ENGAGED IN YOUR CREDIT REPAIR CAMPAIGN. Even the most benign response may show that the other party is lackadaisical about your concern. Keep it all. How many people have stacks of reports, letters, etc., on their kitchen table or computer desk, LOL? (I sure did.) spouses hate that stuff, don't they? :) :) Ok... keep it all So that's the first type of evidence collection. The second type is really particular to dealing with CAs. If you elect to deal with CAs by phone...and that can be a good choice... despite the pat advice you sometimes hear but again if you elect to deal with CAs by phone... then you MUST record them. otherwise, forget it... send a cease and desist letter to them and only deal with them with written correspondence. There are 1-party states and 2-party states...I'll explain 1-party states refer to those states where only 1 of the tapes parties needs to know about the recording in order for the taping to be legal that means... if you're doing the taping and you're one of the people on the call, then it's legal in those states.. 2-party states (and there are fewer of them) require BOTH parties to

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know about the recording, if they told you the call may be taped, then you can tape too, now...here's an interesting distinction that isn't often elaborated if someone calls YOU..and YOU live in a one-party state..then you can tape, irrespective of where they are it's not your responsibility to catalog their call center geography but if YOU initiate a call to a two-party state... or if you live in a two-party state and you initiate the call.

END CREDIT 108

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