“Credit Repair is full of suggestions for restoring your good credit…” PITTSBURGH POST-GAZETTE With Downloadable FORMS 13TH EDITION Credit Repair Make a Plan, Improve Your Credit, Avoid Scams • Learn how to clean up your credit report Attorneys Amy Loftsgordon & Cara O’Neill • Save hundreds of dollars by doing it yourself • Start building positive credit history today OVER 200,000 SOLD Written by Bankruptcy and Foreclosure Attorneys This Book Comes With Lots of FREE Online Resources Nolo’s award-winning website has a page dedicated just to this book Here you can: KEEP UP TO DATE When there are important changes to the information in this book, we’ll post updates And that’s not all Nolo.com contains thousands of articles on everyday legal and business issues, plus GET DISCOUNTS ON NOLO PRODUCTS Get a plain-English law discounts on hundreds of books, forms, and dictionary, all written by software Nolo experts and available READ BLOGS Get the latest info from Nolo for free You’ll also find authors’ blogs more useful books, LISTEN TO PODCASTS Listen to authors discuss timely issues on topics that interest you WATCH VIDEOS Get a quick introduction to a software, online apps, downloadable forms, plus a lawyer directory legal topic with our short videos With Downloadable FORMS Get forms and more at LAW for ALL www.nolo.com/back-of-book/CREP.html The Trusted Name (but don’t take our word for it) “ In Nolo you can trust.” THE NEW YORK TIMES “ Nolo is always there in a jam as the nation’s premier publisher of do-it-yourself legal books.” NEWSWEEK “ Nolo publications…guide people simply through the how, when, where and why of the law.” THE WASHINGTON POST “ [Nolo’s]…material is developed by experienced attorneys who have a knack for making complicated material accessible.” LIBRARY JOURNAL “ When it comes to self-help legal stuff, nobody does a better job than Nolo…” USA TODAY “ The most prominent U.S publisher of self-help legal aids.” TIME MAGAZINE “ Nolo is a pioneer in both consumer and business self-help books and software.” LOS ANGELES TIMES 13th Edition Credit Repair Attorneys Amy Loftsgordon & Cara O’Neill LAW for ALL THIRTEENTH EDITION Editor Cover Design Production Proofreading Index Printing OCTOBER 2017 CARA O’NEILL SUSAN PUTNEY SUSAN PUTNEY SUSAN CARLSON GREENE SONGBIRD INDEXING SERVICES BANG PRINTING Names: Loftsgordon, Amy, author Title: Credit repair : improve and protect your credit / Attorney Amy Loftsgordon Description: 13th edition | Berkeley, CA : Nolo, 2017 | Includes index Identifiers: LCCN 2017018843 (print) | LCCN 2017031114 (ebook) | ISBN 9781413324297 (ebook) | ISBN 9781413324280 (pbk.) Subjects: LCSH: Consumer credit United States Handbooks, manuals, etc | Finance, Personal United States Handbooks, manuals, etc | Consumer credit Law and legislation United States Classification: LCC HG3756.U54 (ebook) | LCC HG3756.U54 L46 2017 (print) | DDC 332.7/43 dc23 LC record available at https://lccn.loc.gov/2017018843 This book covers only United States law, unless it specifically states otherwise Copyright © 1996, 1997, 1999, 2000, 2001, 2002, 2005, 2007, 2009, 2011, 2013, 2015, and 2017 by Nolo All rights reserved The NOLO trademark is registered in the U.S Patent and Trademark Office Printed in the U.S.A No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without prior written permission Reproduction prohibitions not apply to the forms contained in this product when reproduced for personal use For information on bulk purchases or corporate premium sales, please contact the Special Sales Department Call 800-955-4775 or write to Nolo, 950 Parker Street, Berkeley, California 94710 Please note We believe accurate, plain-English legal information should help you solve many of your own legal problems But this text is not a substitute for personalized advice from a knowledgeable lawyer If you want the help of a trained professional—and we’ll always point out situations in which we think that’s a good idea—consult an attorney licensed to practice in your state About the Author Amy Loftsgordon has worked in the area of foreclosure and debt collection for over ten years Her broad experience includes helping people fight collection actions and enforcing debtors’ rights under the Fair Debt Collection Practices Act As part of a national settlement involving the mortgage industry, she has also reviewed servicer records to uncover extensive credit reporting errors Amy has authored numerous foreclosure, debt, and real estate articles on Nolo.com She is the coauthor of Nolo’s The Foreclosure Survival Guide: Keep Your House or Walk Away with Money in Your Pocket and will be updating the 15th edition of Nolo’s Solve Your Money Troubles Amy received a B.A from the University of Southern California and a law degree from the University of Denver Sturm College of Law and is licensed to practice law in Colorado Cara O’Neill is a bankruptcy attorney in Northern California and a legal editor who edits and authors several Nolo book titles Prior to joining Nolo, Cara practiced for over 20 years in civil litigation and bankruptcy During that time, she served as an Administrative Law Judge mediating disputes in the automotive industry, taught undergraduate and graduate law courses, and served as house counsel for a large insurance company She earned her law degree in 1994 from the University of the Pacific, McGeorge School of Law, where she served as a law review editor and graduated a member of the Order of the Barristers—an honor society recognizing excellence in courtroom advocacy Cara maintains a bankruptcy practice in Roseville, California at the Law Office of Cara O’Neill Acknowledgments Many thanks to the previous coauthors of Credit Repair, John Lamb and Margaret Reiter, for whipping this book into excellent shape and adding valuable insights based on their many years of consumer and debt experience —The Nolo Editorial Staff Table of Contents Your Credit Repair Companion 1 The Elements of Repairing Credit Reports and Credit Scores: The Nuts and Bolts Credit How Creditors Evaluate Your Creditworthiness Credit Reports and Credit Scores: What’s the Difference? 10 Your Credit Report 11 Getting Your Credit Report 13 What Is in a Credit Report? 20 Investigative Reports 26 Who Can Look at Your Credit Report 27 Your Credit Score: What It Is and Why It Matters 32 How Credit Scores Are Calculated 33 What Credit Score Do You Need to Get Credit? 39 Getting Your Credit Score 41 First Step to a Better Credit Score— The Cleaning Up Your Credit Report 49 Common Errors in Credit Reports 51 Your Right to an Accurate Credit Report .53 Review Your Report for Errors and Incomplete or Prohibited Information 58 Dispute Incomplete and Inaccurate Information 60 Add an Explanatory Statement to Your Credit File 74 Add Positive Information to Your Credit Report 75 Check Your Credit Reports Often 79 Avoid Credit Repair Clinics 80 Your Financial Situation 85 Assess How to Assess Your Financial Situation 87 Determining Your Credit Repair Options Based on Your Financial Situation 97 Current Expenses and Debts 103 Reducing Cutting Expenses 104 Reducing Current Debt Obligations .113 Reducing Mortgage Debt 122 Filing for Bankruptcy 127 Money to Pay Your Debts 131 Finding Ways to Raise Money 132 Options to Avoid 144 With Creditors and Debt Collectors 151 Negotiating Prepare a Negotiating Plan 152 Negotiating With Creditors and Debt Collectors 159 Dealing With Debt Collectors 168 Tax Consequences of Forgiven Loans 184 Help to Negotiate and Manage Debts 187 Getting Avoid Most Debt Relief Services 188 How Does a Debt Management Plan Work? 192 Debt Management Plans vs Chapter 13 Bankruptcy 194 Choosing a Good Credit Counseling Organization .194 After You’ve Chosen an Agency, Monitor Your Plan 200 Positive Credit History .203 Building First Steps to Rebuilding Credit 205 Ways to Improve Your Credit History Without Getting New Credit 211 Next Steps to Rebuilding Credit—Getting New Credit 223 Putting It All Together: Preventing Future Financial Problems 232 Be on Guard for Credit Discrimination .234 and Using Credit Cards 241 10 Choosing Choosing Credit Cards 242 Using Credit Cards: How to Protect Yourself 248 and Dealing With Identity Theft 251 11 Avoiding The Crime of Identity Theft: The Scope of the Problem .252 What’s in a Stolen Name? 253 How Can an Identity Be Stolen? .254 How to Protect Yourself 256 Protecting Your Social Security Number 261 If Your Identity Is Stolen 263 Identity Theft Protection Products and Insurance 271 Appendixes 275 A Resources Debtors Anonymous 276 Nolo Publications 276 Other Publications .277 Online Resources 278 Where to Complain: Federal Agencies 280 State Consumer Protection Agencies 282 and Letters .291 B Forms Form F-1 Request Credit Report Form F-2 Form F-3 Form F-4 Form F-5 Form F-6 Form F-7 Form F-8 Form F-9 Form F-10 Form F-11 Request Reinvestigation Request to Furnishing Creditor to Reinvestigate Request Follow-Up After Reinvestigation Request Removal of Incorrect Information by Creditor Creditor Verification Request Addition of Information Showing Stability Request Addition of Account Histories Monthly Income Your Debts Daily Expenses 390 | CREDIT REPAIR Equal Credit Opportunity Act (ECOA), 222, 235–236 Equifax, 20 See also Credit reporting agencies Equifax Credit Score, 46 Eviction resources, 99 Expenses, 93–94, 100–101, 102 Expense reduction, 104–112 overview, 104–105, 111–112 canceling credit card payment protection and monitoring services, 110 insurance policy payments, 105–107 negotiating with creditors, 113 property tax payment amount, 107 rent payments, 107–109 tax return preparation for free, 110–111 telephone, cable, and Internet service, 110, 112 utility bills, 109 Experian, 20, 62, 78 See also Credit reporting agencies Experian Automotive, 40–41 Experian Plus Score, 46 Experian RentBureau rental history report, 16 Experience gifts, 112 Extended warranties on purchases, 107 F Fair and Accurate Credit Transaction Act (FACTA), 13, 272 Fair Credit Reporting Act (FCRA) on CRA requirement to provide a free credit report annually, 13 on creditor reporting discharged debts to CRAs, 52 and illegal access to your credit report, 31 and suing a CRA for serious harm, 73 on your right to an accurate credit report, 53–58 Fair Debt Collection Practices Act (FDCPA), 171–172, 174–177 Fair Housing Act (FHA), 235– 236 Fair Isaac See FICO False Change of Address Complaint, U.S Post Office, 268 False representations by debt collectors, 176–177 Fannie Mae effect of foreclosure, short sale, or deed in lieu on next mortgage, 209, 210 and FICO score, 40, 41 Flex Modification program, 124 INDEX | 391 FDCPA (Fair Debt Collection Practices Act), 171–172, 174–177 Federal Family Educational Loans (FFELs), 28, 55–56, 119 Federal Housing Administration (FHA), 40, 140, 210 Federal insurance on reverse mortgage loans, 141 Federal laws on annuities purchased with reverse mortgages, 143 on child support delinquencies and credit report, 25 Community Reinvestment Act, 236 on creditors and identity theft, 253 Credit Repair Organizations Act, 82–83 Dodd-Frank Act, 31 Equal Credit Opportunity Act, 222, 235–236 Fair and Accurate Credit Transaction Act, 13, 272 Fair Credit Reporting Act, 13, 31, 52, 53–58, 73 Fair Debt Collection Practices Act, 171–172, 174–177 Fair Housing Act, 235–236 Identity Theft and Assumption Deterrence Act, 272 and re-aging your account, 157 on reverse mortgages, 141, 142 Servicemembers Civil Relief Act, 112 See also individual federal agencies Federal Trade Commission (FTC) overview, 280–281 for complaints about a creditor or CRA, 73 for complaints against credit repair clinics, 83 on credit counseling service disclosure requirements, 196 and debt collectors, 171 on debt relief services, 190–191 do-not-call list, 260 enforcement of FCRA, 31 enforcement of FDCPA, 177, 178–179 identity theft resources, 265–266, 267, 271 on lost or stolen credit, ATM, and debit cards, 219 on opt-out choices, 259 on phishing/suspicious emails, 257 tips and warning signals for choosing a credit counselor, 200 FFELs (Federal Family Educational Loans), 28, 55–56, 119 FHA (Fair Housing Act), 235–236 392 | CREDIT REPAIR FHA (Federal Housing Administration), 40, 140, 210 FICO estimator at bankrate.com, 247 FICO Mortgage Score, 36 FICO scores overview, 33–36 and debt management plan, 193 estimate of, 46 and foreclosure, short sale, or deed in lieu, 209–210 impact of bankruptcy, 129–130 impact of foreclosure, short sale, or deed in lieu, 126–127 impact of mortgage loan modification, 125 and medical debt, 37 and new credit or new credit inquiries, 223, 247 not included items, 35 See also Credit scores Financial education from credit counseling services, 193, 194 Financial emergencies overview, 97 putting credit repair on hold for, 50, 97–98, 100 resources, 98–100, 101 Financial situation assessment, 85–102 overview, 86, 87 comparing income to debt, 92 credit repair options based on, 97–102 debt payment amounts and total debt amount, 89–90 income amount, 87 income sufficient to cover living expenses, 102 living expenses exceed income, 100–101 making a budget, 95–97, 130, 232, 234 monthly living expenses tally, 93–94 and rebuilding your credit, 207 tracking money for savings and debt reduction, 94–95 Fixed APRs, 243, 244 Flea markets for selling personal property, 135 Forbearance agreement for mortgage payments, 123 Forbearance remedy for student loans, 117 Foreclosure, 126–127, 142, 208–209 Fraud avoiding bad deals and scams when raising money, 144–150 avoiding credit report scams when jobhunting, 29 credit file segregation, 81 fraud alert in CRA files, 18–19, 265–265, 267 free credit report for credit file errors due to fraud, 18–19 imposter websites, 15 INDEX | 393 potential for fraudulent credit counseling services, 195 protecting yourself from credit counseling services, 199 “satisfied customers” paid by company to say good things, 84 scammers collecting personal information, 257 with soft close of credit card account, 218 websites with offer of “free” credit scores, 45 See also Identity theft Frivolous disputes and CRAs, 66–67, 81–82 Front-loaded fees of debt relief service companies, 191 FTC See Federal Trade Commission G Getting help, 168, 188 See also Credit counseling services; Lawyers Gifts, experience, 112 Goals formulated in negotiation plan, 156–158 Government agencies See individual agencies Grace period for credit card debt, 215, 224, 243, 246 H Habitual overspending, 206 HAMP (Home Affordable Modification Program), 125 Harassment by debt collectors, 176, 179 HECM (Home Equity Conversion Mortgage) program (FHA), 140 HELOC (home equity line of credit), 137–139 HHS (U.S Department of Health and Human Services) LIHEAP program, 109 Home Affordable Modification Program (HAMP), 125 Home Equity Conversion Mortgage (HECM) program (FHA), 140 Home equity line of credit (HELOC), 137–139 Home equity loan or credit line, 137–139 HUD See U.S Department of Housing and Urban Development I IC3 (Internet Crime Complaint Center), 135 Identity theft, 251–273 overview, 252 394 | CREDIT REPAIR data breaches and, 252, 255–256, 258 free credit report for errors due to, 18–19, 264–265 insurance and other protection products, 107, 271–273 opting out of information sharing, 259–260 process thieves use, 254–256 protecting yourself, 256–259 responding to, 263–271 scope of the problem, 252–253 “security freeze” or “file freeze” at CRAs, 260–261, 270 and Social Security numbers, 255, 256, 257, 258, 261–263, 269 See also Fraud Identity theft, responding to overview, 270 applying for a new driver’s license number, 270 asking businesses to remove fraudulent charges and stop providing information to CRAs, 269 checking for fraudulent use of your Social Security number, 269 closing unaffected existing accounts, 265 contacting CRAs, 264–265, 267 contacting everyone you pay money to regularly, 263, 268 and debt collectors contacting you for identity theft-related expenditures, 270 filing a False Change of Address Complaint, 268 filing a police report, 266–267 filling out the FTC’s ID Theft Report, 265–266 providing proof of identity theft to creditors, 268 record keeping, 270 reporting stolen checks, 265 requesting a fraud alert, 18–19, 264–265, 267 requesting copies of thief’s purchase records from businesses, 269 reviewing your credit reports, 265 “security freeze” or “file freeze” at CRAs, 260–261, 270 Identity Theft and Assumption Deterrence Act (1998), 272 Identity Theft Letter to a Credit Bureau (FTC), 267 Identity Theft Report (FTC), 265–266 Imposter websites, 15 Income, 9–10, 87 See also Raising money; Saving money Information sharing, opting out of, 259–260 INDEX | 395 Inquiries credit report section, 25–26, 34–35, 39, 56, 216 and FICO score, 223, 247 Insolvency, 185 Insurance annuities in conjunction with reverse mortgages, 143 and expense reduction, 105–107 federal insurance on reverse mortgage loans, 141 identity theft protection, 107, 273 ISO insurance claims report, 17 life insurance, 28, 56, 106–107, 144 medical insurance, 233 opting out of insurance offers, 259 reducing your policy payments, 105–107 state department of insurance, 105 and your credit report, 28 Insurance Services Office (ISO) claims report, 17 Interest rates adjustable rate mortgages, 138 annual percentage rates, 146, 148, 243–245 asking for a lower rate on a credit card, 227 on auto title pawn/auto title loan, 149 comparison shopping for credit cards, 243 on consolidation loans, 145, 150 credit-score as basis for, 42–44 at pawn shops, 148–149 on payday loans, 148 Internal Revenue Service (IRS) direct debit installment agreement with, 57 early distribution penalty on retirement account withdrawals, 136 and Earned Income Tax Credit, 133 Employer Identification Number, 81 Free File service, 111 Identity Theft Affidavit, 263 lowering income tax withholding amount, 132–133 removing tax liens from credit reports, 56–58 tax consequences of forgiven debt, 184–185 Internet See Online services Internet Crime Complaint Center (IC3), 135 Investigative reports, 26 Investments, 234 IRS See Internal Revenue Service ISO (Insurance Services Office) claims report, 17 396 | CREDIT REPAIR J Jewelers, selling personal jewelry to, 135 Jobhunting, avoiding credit report scams when, 29 “Judgment proof” position, 153, 182, 184 Judgments or court orders, 30, 39, 54 Junk mail, opting out of, 260 L Landlords viewing your credit report, 27 Lawsuits CFPB against Navient, 120–121 for collecting a debt, 174 by debt collection agencies, 183–184 against debt collectors for harassment or FDCPA violations, 179 for illegally accessing your credit report, 31 length of time in credit report, 54 resources, 99 suing a CRA for serious harm, 73 suing a creditor that provided incorrect information to CRAs, 73 suing a credit repair clinic, 83 Lawyers overview, 98, 168 and debt reduction, 120–121 for resolving financial emergencies, 98 for reverse mortgages, 143 for signing a new agreement with a creditor, 161 for suing a creditor that provided incorrect information to CRAs, 73 Layaway plans at local merchants, 230 Lease payments, 115 Legal rights overview, of active duty servicemembers, 112, 148, 149, 271 debtor’s rights in dealing with debt collectors, 171–172 resources, 259, 260 your right to an accurate credit report, 53–58 Letters and forms overview, 64–65, 68 asking that negative notation be removed from your credit report, 181–182 to collection agency telling it to cease all communication with you, 183 to company that supplied incorrect information to CRAs, 68 INDEX | 397 to CRA requesting additional account histories be added to your credit report, 77–78 CRA response or failure to respond, 67, 69–73 demand to creditor to remove incorrect information from your credit report, 71–72 disputing incorrect information on your credit report, 62–63, 76 False Change of Address Complaint, 268 guidelines for, 67 Identity Theft Letter to a Credit Bureau, 267 to landlord to confirm rent payment reduction, 107, 108 “Move Validation Letter” from U.S Post Office, 258 negotiation letter forms, 161–167 Notice to Furnishers of Information, 268 See also Dispute letters; Negotiation letters LexisNexis personal credit reports, 16 Life insurance, 28, 56, 106–107, 144 LIHEAP (Low Income Home Energy Assistance Program), HHS, 109 Loans avoiding joint obligations, 233 borrowing from family or friends, 143–144 deferring payments on student loans, 117 P2P loan websites, 149–150 predatory lenders, 207 for rebuilding your credit, 230–232 See also Credit cards; Debt; Interest rates; Mortgage loans Lump sum settlement offer to debt collector, 180–181 M Marital status and credit report, 21, 59 and income, 87 and rebuilding your credit history, 220–222 and reverse mortgage loans, 142 Medicaid and reverse mortgages, 141 Medical debt, 17, 37, 120–121 Medical Information Bureau medical history report, 17 Medical insurance, 233 Misleading representations by debt collectors, 176–177 Mobile applications for selling items in your neighborhood, 135 Mortgage loans overview, 27, 122–123 398 | CREDIT REPAIR ARMs, 138 and CAIVRS, 210 and credit file fitness, 36–37 and credit score, 33–36, 40, 41 debt reduction strategies, 123–127 effect of bankruptcy, 211 effect of foreclosure, short sale, or deed in lieu on getting a new mortgage, 208–211 forbearance agreements, 123 and foreclosure, 126–127, 142, 208–209 modification programs, 124–125 resources, 123, 124, 140 reverse mortgages, 139–143 Motor vehicles auto title pawn/auto title loan, 149 driver’s license number and identity theft, 270 insurance companies viewing your credit report, 28 reducing purchase or lease payments, 114–115 “Move Validation Letter” from U.S Post Office, 258 N Names rebuilding your credit history with your own name, 220–222 stolen names, 253–254 National Association of Insurance Commissioners, 105 National Consumer Law Center (NCLC), 190 Navient, CFPB lawsuit against, 120–121 Negotiation letters, 161–167 overview, 161–162, 166–167 can meet regular payments; can’t makeup missed payments, 163 can’t make your regular payments, 162–163 returning secured property to settle debt, 165 settlement offer for less than full amount, 163–165 verifying compliance with, 167–168 Negotiation plan, 152–158 overview, 152 deciding which debts to pay down first, 153–155 determining how much money you have to negotiate, 152–153 differences between creditors and debt collectors, 155–156, 158 identifying your goals, 156–158 Negotiations, 151–185 overview, 6, 152, 159–161 and choosing a credit card to pay down first, 155 with creditors, 113 with debt collectors, 179–182 and expense reduction effort, 113 INDEX | 399 getting help, 168 “judgment proof” position vs., 153, 182, 184 signed release from creditor, 160–161 with telephone, cable, and Internet companies, 110 See also Negotiation letters Nonprofit credit repair clinics, 82–84, 188, 191, 195, 196, 200 Notice to Furnishers of Information (CFPB), 268 O Online services auction websites, 134–135 banks offering secured credit cards, 82 calculator comparing credit score to cost of credit, 36 disputing credit report information, 62, 65 FICO estimator, 247 FTC Identity Theft Report, 265–266 and identity theft, 252 imposter websites, 15 “keeping the auto repo man at bay” search, 115 obtaining your credit report, 20 OnGuardOnline.gov, 257 opting out of junk mail, 260 P2P loan websites, 149–150 Privacy Rights Clearinghouse, privacyrights.org, 259, 260 resources, 278–279 saving money tips, 112 shopping for a credit card online, 246 Social Security account, 262 websites with offer of “free” credit scores, 45 Open-ended credit accounts overview, amount owed and credit scores, 34, 39 reviewing your credit report for errors, 59–60, 79–80, 256, 265 See also Credit cards Opting out of information sharing, 259–260 Over-limit protection and fees on credit cards, 245–246 P P2P (peer-to-peer) loan websites, 149–150 Password security, 256 Pawn shops, warning about, 148–149 Payment history and credit scores, 34, 38 Peer-to-peer (P2P) loan websites, 149–150 Penalty APRs, 243 Perkins loans, 56 400 | CREDIT REPAIR Personal information section in credit report, 21, 58 Pew Center on the States, 148 Pew Research survey of checking account fees, 212 Phishing, 257 Phone companies, 25, 263, 268 PLUS student loans, 28, 55–56 Police report on identity theft, 266–267 Post bankruptcy discrimination, 237–238 Preapproved credit card offers, 248 Prepaid cards, 220 Prioritizing debts, 90, 91–92 Privacy Rights Clearinghouse, privacyrights.org, 259, 260 Professional services bills and debt reduction, 120–121 Project on Student Debt, 120 Property tax payment amount, 107 Public assistance and free credit report, 18 Public records section in credit report, 25, 59 Published resources, 276–277 Purchased debts (creditor sells the debt), 169, 170–171, 181 R RACs (refund anticipation checks), 146–147 Raising money, 131–150 advertisements claiming easy solutions to debt problems, 150 auto title pawn/auto title loan, warning about, 149 borrowing against life insurance, 144 borrowing from family or friends, 143–144 consolidation loans, warning about, 145, 150 Earned Income Tax Credit, 133 home equity loan or credit line, 137–139 lowering income tax withholding, 132–133 P2P loan websites, warning about, 149–150 pawn shops, warning about, 148–149 payday loans, warning about, 147–148 reverse mortgages, 139–143 selling personal property, 134–136 tax refund anticipation loans and checks, warning about, 146–147 withdrawing or borrowing money from a tax-deferred account, 136–137 RALs (refund anticipation loans), 146, 147 INDEX | 401 Re-aging a past due account, 157–158, 181 Real estate, home equity loan or credit line on, 137–139 See also Mortgage loans Rebuilding your credit guarding against credit discrimination, 234–239 preventing future problems, 232–234 Rebuilding your credit, preparations for, 203–211 overview, 205 and credit card management, 209 effect of bankruptcy, 211 effect of foreclosure, short sale, or deed in lieu, 208–211 evaluating your readiness to have credit, 205–207 time required to qualify for reasonably priced credit, 207–208 Rebuilding your credit history, 211–222 avoiding debit cards, 218–220 avoiding prepaid cards, 220 closing credit card accounts, 216–218, 265 increasing credit limit to improve FICO score, 215–216 open deposit accounts, 212–214 using credit cards wisely, 215 using your own name, 220–222 Rebuilding your credit with new credit, 223–232 applying for a credit card, 223–228 authorized user accounts, 228–229 obtaining a bank or credit union loan, 230–232 optimum number of credit cards, 226 unsecured credit cards, 225–227 working with local merchants, 229–230 Recession of 2008–2009, 207–208 Refund anticipation checks (RACs), 146–147 Refund anticipation loans (RALs), 146, 147 Rehabilitating a student loan, 119 Reinvestigation of disputed information on your credit report, 61–65 Relationship status and income, 87 See also Marital status Rent payment reduction, 107–109 Repayment plan for delinquent mortgage payments, 123 Resale shops for selling personal property, 135 Retailers and credit report, 25 Retailer websites, selling personal property on, 135 Retirement accounts, withdrawing or borrowing money from, 136–137 402 | CREDIT REPAIR Reverse mortgages, 139–143 Rights See Legal rights Risk-based pricing notice, 42–43 S Sallie Mae, 119 Saving money, 94, 95, 233 See also Debt reduction; Expense reduction Scams See Fraud; Identity theft SCRA (Servicemembers Civil Relief Act), 112 Secured credit cards, 223–225 Secured debt overview, 90, 91–92 reducing your debt obligation, 115–116 returning secured property to eliminate debt, 156–157, 165 Security breaches and identity theft, 252, 255–256, 258 “Security freeze” or “file freeze” at CRAs, 260–261, 270 Servicemembers active duty alert on credit report, 271 protection from high interest rate loans, 148, 149 reducing payments on credit accounts and stopping collection efforts while on duty, 112 Servicemembers Civil Relief Act (SCRA), 112 Settlement companies, 189–190 Short sale, 126–127, 209–211 Simplifying your life, 206 Social Security Administration, 262–263 Social Security numbers and identity theft, 255, 256, 257, 258, 261–263, 269 Specialty consumer reporting agencies, nationwide overview, 12, 16 Certegy check writing report, 17 checking your report, 80 ChexSystems check writing report, 17 Experian RentBureau rental history report, 16 free credit report from, 13 ISO insurance claims report, 17 LexisNexis personal reports, 16 Medical Information Bureau medical history report, 17 Telecheck check writing report, 17 Spending plan/budget, 95–97, 130, 232, 234 SSI (Supplemental Social Security) and reverse mortgages, 141 Stability adding information to your credit report, 76–77 INDEX | 403 bank accounts as a sign of, 212 creditor evaluation of, 10, 205 State consumer protection agencies, 73, 179, 282–289 State department of insurance, 105 State laws on annuities purchased with reverse mortgages, 143 on credit discrimination, 236 on creditors disclosing your credit score, 45 on credit repair clinics, 84 on debt collector practices, 171 on identity theft, 272 on layaway plans, 230 on pawn shop interest rate, 149 and re-aging your account, 157 statutes of limitation, 154 Statutes of limitation on collection of debt, 154 Student loans and CAIVRS, 210 canceling, 116, 119 CFPB remedy, 118 Corinthian Colleges students’ options, 117–118 and debt reduction, 116–120 default consequences, 116, 119 lenders viewing you and your parents’ credit reports, 28 length of time adverse information stays in credit report, 55–56 resources, 120, 190 warning about debt relief services, 190 Supplemental Social Security (SSI) and reverse mortgages, 141 T Tax advisers, consulting with, 133 Tax consequences of forgiven loans, 184–185 Tax Counseling for the Elderly (TCE) program, 111 Tax liens, 54, 56–58, 99 Tax refund, 132–133, 146–147 Tax return preparation for free, 110–111 TCE (Tax Counseling for the Elderly) program, 111 Telecheck check writing report, 17 Third-party communication by debt collectors, 175 Tradelines overview, 23 and date of delinquency, 24, 54–55, 60 and disputed debts, 174 and loan modifications, 125 negotiating removal from credit report, 155, 158, 161, 181 TransUnion, 20 See also Credit reporting agencies TransUnion Score, 46 404 | CREDIT REPAIR U Unemployment and free credit report, 18 Unfair practices of debt collectors, 177 Unsecured credit cards, 225–227 Unsecured debt, 91–92 U.S Citizenship and Immigration Services, 30 U.S Department of Education (DE), 120, 190 U.S Department of Energy (DOE), 109 U.S Department of Health and Human Services (HHS) LIHEAP program, 109 U.S Department of Housing and Urban Development (HUD) overview, 281 for credit discrimination complaints, 239 housing counselors, 124 and reverse mortgage laws, 142 U.S Department of Justice (DOJ), 281 U.S Post Office False Change of Address Complaint, 268 “Move Validation Letter” from, 258 U.S Trustee-approved credit counseling agencies, 197 Utility companies contacting after identity theft, 263, 268 payment reduction, 109 and your credit report, 25, 27–28 V VantageScore, 38–39 Victims of identity theft, 254 See also Identity theft Voluntary simplicity movement, 206 Volunteer Income Tax Assistance Program (VITA), 111 W Weatherization Assistance Program, 109 Y Yard sales for selling personal property, 135 l ... improving your credit as well as assessing your financial situation How Creditors Evaluate Your Creditworthiness A potential creditor may want to know whether you are likely to repay an installment sale... Learning about your credit report and assessing your financial situation (Chapters 2, 3, and 4) The first step in credit repair is to get a clear picture of your current financial situation and... information about your debts, but not about your income Your existing credit and credit limits Creditors also examine your existing credit relationships, such as credit cards, bank loans, and mortgages