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The Credit Repair Bible All the Secrets to Never Be Turned Down for a Loan Again and Save

Thousands of Dollars in interest Payments Copyright 2008 Chris Linus

Notice of rights All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Disclaimer This book is intended to be used as a guide and it does not replace the figure of an attorney. The information contained in this report is for informational purposes only and is not legal advice. While the author and/or publisher have carefully researched information from credible sources, they cannot guarantee the accuracy, correctness or intended use of the information presented. The author and/or publisher hereby disclaims any liability for loss, risk, damage, inconvenience (real or imagined), that may be incurred by or resulting from the use of any ideas, information, or opinions contained or presented in this book. As with any credit or legal matter, a consumer should seek the advice of a competent legal professional before applying any of the information presented in this book.

TABLE OF CONTENTS ................................................................... 2 Contents................................................................................... 2 PREFACE WHY YOUR FINANCIAL FUTURE DEPENDS ON HAVING A GREAT CREDIT SCORE.............................................. 4 PART 1 - HOW A BETTER CREDIT SCORE CAN SAVE YOU OVER $100,000 ON YOUR MORTGAGE ALONE................................... 8 Case Study: The Impact of a Credit Score on a $250,000 Mortgage ................................................................................. 8 Case Study: The Impact of a Credit Score on a $20,000 Car Loan................................................................................... 9 Conclusion: The Highest Paid Work You Will Ever Do ........ 10 PART 2 - THE BASICS................................................................... 12 What is a Credit Score? ........................................................ 12 How is Your Credit Score Calculated? ............................... 14 Do You Have Good Credit? ................................................ 16 What is Your Score? .............................................................. 17 PART 3 - IMPROVING YOUR CREDIT SCORE: BASIC PRINCIPLES .................................................................................................... 19

The 2 Most Important Concepts You Will Ever Learn About Your Credit Score .................................................................. 19 The 10 Commandments for Building a Great Credit History ................................................................................................. 20 A Step-By-Step Plan to Start Creating Healthy Financial Records................................................................................... 27 PART 4 SKYROCKETING YOUR CREDIT SCORE: ADVANCED STRATEGIES ................................................................................. 32 Step 1: Setting Up the Plan ................................................... 32 Step 2: Building a Positive Credit History ............................. 39 Step 3: Disputing the Negative Items.................................. 41 Step 4: Following Up.............................................................. 58 PART 5 ALL YOU NEED TO KNOW TO BOOST YOUR FINANCIAL IQ BY 1000%............................................................ 61 All the Secrets to Negotiate With Creditors and Save Thousands of Dollars.............................................................. 61 HOW TO PROTECT YOURSELF FROM ID THEFT (OR FIGHT IT, IF ITS TOO LATE) ........................................................................ 62 How to Get Rid Of Annoying Collection Agencies ........... 65 How to Achieve a 700-Credit-Score Within 36 Months of Filing for Bankruptcy.............................................................. 66 How to Get a Checking Account If You Are In ChexSystems .......................................................................... 67 3

Credit Repair Agencies (For Busy People) ......................... 68 PART 6 - BONUSES...................................................................... 70 EPILOGUE ................................................................................... 78


There is something that makes the American economy unique: the easy access to credit. It has become common to buy not only homes and cars, but also home appliances, boats, and even pay for vacations with credit cards. The truth is that credit can be really good and very bad at the same time. It just depends on how you use it. If you are responsible and know how to play the game, then you can use your credit to build a business, invest in real estate, or maybe in the stock market. But if you dont know what you are doing, credit can be dangerous, very dangerous. Think about it: you can buy almost anything that you want even if you dont have the money to pay for it! They make it sound great: get this, get that. You dont have to pay for it, just slide your card! And then you realize that all these small monthly payments are eating up all your income. And the worst part is that your debt never decreases, you are just 4

paying interest. You are working really hard to make somebody else rich! Again: credit can be a really good thing; you just have to learn how to use it in your favor instead of against you. I like to say that there are two different kinds of debt: good debt and bad debt. Good debt is money you use to make some kind of investment (start or grow a business, invest in stock, buy investment real estate, etc.) Bad debt is when you use your credit to buy consumer goods: a bigger TV, a week in Hawaii, expensive restaurant meals, etc. Essentially, good debt can make you wealthy; bad debt can make you broke. The one question that you need to ask yourself to find out whether a debt is good or bad is this: Will this put money into my pocket or take it out? If you are reading this book, you probably have some credit problems. But I want you to know that you can solve them. In fact, I am sure you will. The fact that you bought this book is a good sign that you are committed to solve your credit problems. But let me warn you: reading this book is just the first step. Nothing will happen until you actually DO what this book teaches you. If you dont go out there and do what it takes to improve your financial situation, nobody will do it for you. This book is about improving your credit score. But why is that so important? Because with a bad credit history you will

miss the best opportunities: the best mortgages, the best car loans, and the best credit card rates. Many lenders will just avoid doing business with you, and those who dont, will charge you outrageous interest rates. They will see you as a big risk, so they will make sure they get paid well for taking that risk. You will end up paying thousands of dollars extra in interest. But dont freak out. It doesnt matter how bad your credit is, you now have a step-by-step plan to dramatically improve it in a short period of time. The first thing you need to keep in mind is that information is power. This is a game, and if you know how to play it, you can radically benefit from it. Unfortunately, most of the information contained in this book is not available to everybody. If it were, we wouldnt see so many people suffering from financial problems. I will teach you the rules; I will teach you the secrets. I will reveal the truths and the myths. Once you know how the system works, you can make it work to your advantage. You will notice that a lot of times the system doesnt make a lot of sense, or it just doesnt seem fair. Dont waste your time judging it. Theres nothing you can do about it, except for learning how it works and take advantage of it. If you want to read the Fair Credit Reporting Act, visit this website: You dont need to if you dont want to, because I will

explain to you exactly what the FCRA is all about and how can you take advantage of it. I hope you enjoy reading this book and I can guarantee that if you do at least a couple of the things that this book will teach you, you will see your credit score getting a lot better, you will save thousands of dollars, and your financial situation will improve in a way you never thought possible.

It is essential that you understand what a huge difference a credit score can make when it comes to loan payments. Most people dont understand the power of a good credit score until they see case studies like the ones I am about to show you. I believe that there is no better way to make a point than showing you real cases; real examples where a good score can make all the difference.

Case Study: The Impact of a Credit Score on a $250,000 Mortgage

This is an example of a typical 30-Year fixed mortgage for the amount of $250,000. You can clearly see how someone with a credit score of 720 will pay $1,479 a month and the total interest that he will pay during 30 years will be $282,557, slightly more than the principle amount. Now, compare that to someone who has a score of 559. This persons monthly payments will be $2,763 (almost twice as much as the person with a good credit score!) And he will pay $744,524 in interest. That is 3 times as much as what the 8

first person will pay. It is half a million dollars more! You dont want to pay that much more, do you?

Case Study: The Impact of a Credit Score on a $20,000 Car Loan

In this case, we can clearly see that someone with a really good credit score will be offered an interest rate of 5.8%. Now, compare that to the almost 15% interest rate that someone with bad credit will get. The first person will pay

only $3,088 in interest, whereas Mr. Bad Credit will pay $8,500, almost 3 times as much.

I hope that by now you realize that we are not talking just about a number that doesnt really mean that much. We are talking about thousands of dollars you are giving away and should be keeping for yourself. If you are paying for a $250,000 house and a $20,000 car, you can save $1,400 a month by just having a good credit score. How does an extra $1,400 in your pocket every month sound? 10

To use the same debt calculator tool I used to calculate these payments visit this website: sp


A credit score is a 3-digit number that ranges between 450 and 900 and rates your credit history. Lenders use this information to determine how much risk is involved in lending money to you. The higher your credit score is, the less risky you are considered by lenders. Your credit score is based on your credit report. A credit report is a snapshot of your credit history for the last 7 years. It shows late payments, collection accounts, current debt, and also positive items, such as bills paid on time, paid as agreed, never late, etc. Your credit score doesnt bring into consideration race, color, national origin, marital status, salary, occupation, title, employment history, etc. You might think that your current credit score is fair, or maybe you dont think it is. But the truth is that this system, even with its deficiencies, can give the lender an idea of how responsible you have been at managing your finances, and he will take that into consideration when he decides if he is going to approve you for a loan, and what rate he is going to offer you.


There are 3 main companies that monitor your credit report: Experian, Equifax, and TransUnion. Each one has its own scoring system. Experians system is called Experian/Fair Isaac, Equifaxs is called Beacon, and TransUnions is called Empirica. Each of these companies is referred to as credit bureau. Each credit bureau will have a different credit score for you. This doesnt only happen because they work with different systems, but also because most creditors dont report to the 3 bureaus. For example, if you didnt pay your phone bill last month, the phone company may report to Experian only or maybe to Experian and TransUnion, but not to Equifax. In March of 2006, the 3 bureaus decided to create a new scoring system: VantageScore. Its main purpose was to solve discrepancies between the different scores each bureau had for each person. It made things better, but the system is far from being perfect, and many times there are big differences between the credit scores each bureau will provide for the same person. FICO is a company who provides credit scores based on the reports obtained from Equifax, Experian, and TransUnion. FICO developed its own scoring system called FICO Expansion Score, whose main goal is to include people with a thin or inexistent credit history into their scoring system. Here is the contact information for each of the three bureaus. You will need it when you dispute inaccurate or incomplete negative items on your credit report. 13

EXPERIAN P.O. Box 2104 Allen, TX 75013 (888) 397-3742 EQUIFAX P.O. Box 740241 Atlanta, GA 30374 (800) 685-1111 TRANSUNION P.O. Box 2000 Chester, PA 19022 (866) 726-7388

35% of the score is based on your payment history This makes sense since one of the primary reasons a lender wants to see the score is to find out if (and how timely) you pay your bills. The score is affected by how many bills have been paid late, how many were sent out for collection, any bankruptcies, etc. When these things happened also comes into play. The more recent, the worse it will be for your overall score.


30% of the score is based on outstanding debt How much do you owe in car or home loans? How many credit cards do you have that are at their credit limits? The more cards you have at their limits, the lower your score will be. The rule of thumb is to keep your card balances at 25% or less of their limits.

15% of the score is based on the length of time you've had credit The longer you've had established credit, the better it is for your overall credit score. Why? Because more information about your past payment history gives a more accurate prediction of your future actions.

10% of the score is based on the number of inquiries on your report If you've applied for a lot of credit cards or loans, you will have a lot of inquiries on your credit report. These are bad for your score because they indicate that you may be in some kind of financial trouble or may be taking on a lot of debt (even if you haven't used the cards or gotten the loans). The more recent these inquiries are, the worse for your credit score. FICO scores only count inquiries from the past year.


10% of the score is based on the types of credit you currently have The number of loans and available credit from credit cards you have makes a difference. There is no magic number or combination of types of accounts that you shouldn't have. These actually come more into play if there isn't as much other information on your credit report on which to base the score.

To determine how good your credit is, we will show what the scores of the entire US population looks like so you can do some comparison: Up to 499: 1% 500 - 549: 5% 550 - 599: 7% 600 - 649: 11% 650 - 699: 16% 700 - 749: 20% 750 - 799: 29% Over 800: 11%


There are free and paid services that allow you to access your credit report and score. We strongly suggest that you stick to the paid services for a couple of reasons: they will provide you with more accurate data and the free services usually are not that free after all, and start charging you after a 30-day trial. According to the law, you have the right to get one free credit report every 12 months. To get yours, you can request it online at or calling 877-3228228. Note that they will give you a credit report for free, not a credit score. You can, however, purchase a credit score from them. When you request your credit report, make sure they mail it to you, as opposed to getting the online version, since the report you will receive in the mail will be more complete than the one you can get online. Even if you request your report online, you can get it mailed to you. Additionally, if you have been a victim of ID theft and you have reported it to the bureaus; they will send you a free credit report. Do this only if your identity has really been stolen. Doing it just for the credit report doesnt make sense, since you will be unable to open new accounts for 90 days. If you are thinking about buying a piece of real estate and your broker or lender gets your credit score to evaluate your 17

history, you have the right to get a copy of that score from him or her. There are a couple of credit score estimators online. Although they are not the real deal, they can usually give you a very good idea of what your score could be. And they are free. Check out a couple of them: MSN Money Central: p



The2MostImportantConceptsYouWillEverLearnAbout YourCreditScore
High Credit Limit Your high credit limit is the total amount of unsecured revolving accounts that you have in your name. It includes credit card debt and any other kind of credit not secured by an asset. It doesnt include mortgages or car loans, since these kinds of loans are secured by a piece of real estate and a car, respectively. Lets say you have 4 credit cards, each with a limit of $10,000. Your high credit limit would be $40,000. The higher your high credit limit is, the better your credit score.

Debt-To-Credit Radio The debt-to-credit-radio is the total amount of debt in relation to your available credit. In the previous example, your high credit limit was $40,000. That is how much you are


allowed to borrow. Now, lets say you only borrowed $20,000. In this case, your debt-to-credit radio is 50%. The lower your debt-to-credit ratio, the better your credit score. The lenders assume that if you can borrow $40,000 and you only have a $5,000 debt, you are managing your finances responsibly.

Pay Your Bills on Time It goes without saying that late payments affect your credit score. Obviously, a person with a big list of items showing never late will have a much better score than someone with a bunch of negative hits for late payments.

Start Early Building a good credit history takes time. You wont build an amazing credit record overnight. That is why it is so important to start early.

Open Savings and Checking Accounts A lot of people still rely on cash as a main method of payment. This can be a big mistake if you are trying to build a credit history. Open at least one savings account and one checking account. And use them. 20

Dont Close Old Accounts Closing accounts can be very damaging to your credit score. Keep them open. If you have an old credit card, the first one you ever got, and you are thinking about closing it because the interest rate is 30%, dont do it. Keep it open. Make sure you keep a really small balance, even if its $10, so you dont have to pay a lot in interest. But dont close it. An old account with on-time payments history can boost your credit score. This also applies for store cards, such as a Wal-Mart card, Sears, Home Depot, etc. Dont close them. If you are an obsessive shopper and are afraid of spending money just for having the cards, cut them in half and throw them away, but dont go to the store and ask them to close the account.

Keep Your Debt-to-Credit-Ratio between 10% and 30% If your high credit limit is $40,000, try to have an outstanding balance of between $4,000 and $12,000. If you really need to go over that, never go past 50%. That would hurt your credit. If you have 4 credit cards and you max out all of them, it is not going to help you.


If you decide to pay off your credit cards balances every month, it is not a bad idea, but keep in mind that creditors make their money when you pay interest to them. If you pay your credit card balances in full every month you will have a good score, but not as good as if you kept a 10% balance. Now, lets say you have a high credit limit of $40,000. And your debt is $15,000. That is a debt-to-credit ratio of 37.5%. To decrease that to 30%, where is considered optimal, you can pay $3,000 of your credit card balance and decrease your debt to $12,000. But there is another thing you can do to take your debt-to-credit ratio back to the 10%-30% range. You can increase the limit of one of your credit cards by at least $10,000 (or get a new card with a limit of $10,000 or higher). Now your new high credit limit is $50,000, and even though you still owe $15,000, your debt-to-credit ratio is now 30%. Something else to keep in mind is how to distribute your debt among your accounts. For example, if you have 4 credit cards with a limit of $10,000 each and your total debt amount is $12,000, it would be OK as long as your balance is $3,000 on each of those cards. If one of the cards is maxed out (you used all your credit, which was $10,000), and the other cards have balances of $1,000, $500, and $500 respectively, that will damage your score, since you are way over 30% on one of your cards (actually, the debt-tocredit ratio for the card where you have a $10,000 balance is 100%).


Make sure your debt is distributed evenly among your accounts.

Increase your high credit limit As we mentioned before, a higher credit capacity can increase your credit score. But you need to be very careful about this. If you open too many accounts in a short period of time, it will hurt your score. If last week you had a limit of $10,000 and you went and got 3 new credit cards for $10,000 each within the last 4 days, it will damage your score a lot. There is no rule for how much you can increase your limit to get your credit to improve instead of get worse. It is just common sense. Think about it this way: if you were a lender and you were looking at someones credit report, and this person had a limit of $10,000 until last week, and now she is opening more and more credit cards, taking more debt, you wouldnt see that as a good thing. You would think that this person went crazy and you dont know how well she is going to manage her new credit capacity. One thing is to manage a $10,000 credit limit, and a very different thing is to manage $40,000 all of a sudden. When you were a teenager, your parents let you go to your first party and asked you to be back by 9 PM. For the next party, you probably begged them to let you stay until 9.15 PM, or maybe 9.30 PM, but you didnt ask them to stay until


midnight. They were going to say no. You were smart about it and tried to negotiate little things at a time that you knew you could get. A couple of years later, you were finally allowed to stay until midnight, because you were patient and asked for small things that you knew you could get. The same thing happens with credit scores. If your limit is $10,000 today and $40,000 tomorrow, some red flags will raise and your score will significantly drop. Open new accounts slowly but constantly. Another technique that almost nobody uses but it has proven to be very effective is to call your current credit card vendors and ask them to raise your limit. Ask them to raise it by 50%-100% every 6 months. If you always paid on time and kept your debt-to-credit ratio below 50%, they will almost always agree to do it. You are a good customer to them and if they can make more money on you, why wouldnt they?

Make Sure to Have a Mix of Revolving Debt and Installment Debt So far, we have only talked about revolving debt, which is unsecure credit, such as credit cards and any other type of credit that is not secured against an asset. In order to have a great credit score, you also need to have some installment debt: a mortgage, a car loan, or any other kind of loan secured by an asset.


A lot of people finance their cars even if they dont need to, because it is very beneficial for their credit history.

Use Your Revolving Debt Having a bunch of credit cards is not enough. You have to use them. Try to keep small balances (between 10% and 30%) and use your cards as often as you can. Try to avoid cash. The key is using your cards lightly but regularly. If you just keep them in your wallet, they wont do much for your credit.

Avoid Hard Inquiries There are 2 different kinds of inquiries: soft and hard. Soft inquiries are regular account reviews and they dont affect your credit score, so you dont need to worry about them. Hard inquiries take place when you apply for a firm offer of credit or insurance. They do hurt your credit score and can stay on your credit report for up to 2 years, even though FICO only takes into consideration the ones during the last 12 months to calculate your score. A hard inquiry could lower your score up to 35 points, so only allow them if you are serious about a credit or insurance application within the next 2 months.


Note that nobody can place a hard inquiry on your report unless you authorize them to. It does happen though. Some companies will do it despite of the law. If it happens to you, contact the creditor or collector and ask them for their permissible purpose. We have included a template letter that you can use for this case. If they dont have a permissible purpose, you can ask for and collect damages for up to $1,000 ($2,500 in California). Mortgage broker inquiries are not rare, even when they did not process your application. They have to mail you an approval/denial letter and state that you did not put the application on hold. If not, they had no permissible purpose.

Show a Stable Lifestyle Even though this might not directly affect your credit, showing stability can greatly improve your chances of getting new credit card offers, which can ultimately improve your credit score, as we mentioned earlier in this chapter. Credit card companies are more likely to offer you a card if you didnt recently get divorced, if you have kept the same address for a couple of years, if your mailing address is not a P.O. box, if you have a landline listed as your primary phone number instead of a cell phone, and if you are not selfemployed.


Actually, being self-employed can be very detrimental to your credit. But there is something you can do about it: you can create a business entity (corporation or LLC), and you will basically be an employee of this company. You need to own no more than 55% of this new business, or you will be considered self-employed anyway. Find someone you trust to own the rest of this company. If you see your self-employed status on your credit reports as a negative item, you can always mail a couple of W2s and paystubs to the credit bureaus along with a letter stating that you are an employee and you are submitting proof of that. Talk to your accountant to get help setting this up.

A StepByStep Plan to Start Creating Healthy Financial Records

Some young people, immigrants, and recently widowed or divorced women might have a very thin credit history or even no credit history at all. Some of these people think that credit reports only contain negative hits, and that they are actually better off not having a credit history at all. This is a big misconception. Lets say you fall behind on your cell phone payments, but after a couple of months you bring the balance current. Lenders now know how you are likely to act if you are ever late again on your payments. They know you made a 27

mistake in the past but you also did something to fix it. But if you dont have a credit history, they have no idea about how you are going to act if you fall behind schedule. If you are a married woman who has only joint account with your husband, it is very important that you start creating accounts of your own. Here is why: if your husband has financial difficulties and his credit is affected by that, yours will be too. If you have credit of your own, you and your husband can rely on your credit until he can fix his. There is another reason why you want to build a credit history of your own. If you get divorced, all your joint accounts will be gone, and you will have absolutely no credit history. Believe me: that is a situation you dont want to put yourself in. If your credit is almost nonexistent, you can piggyback your husband credit (more on this technique later) by having joint accounts with him. But once you have built a credit history of your own, you need to open accounts in your name and close the joint accounts. I know I recommended earlier keeping accounts open, but in this case you have more to lose than you have to win. If you have an inexistent or very thin credit history, you need to get started with secured credit cards and catalog cards. With a secured credit card, you make a deposit with a lender and your credit limit is usually equal to the deposit. You can find these cards on or searching on Google for secured credit cards. Please 28

make sure that they report to the bureaus. If they dont, there is no point in doing it. Since the main reason why people get this kind of cards is to start building a credit history, most of the secured cards published out there will report to the 3 bureaus, but it wouldnt hurt to doublecheck. Most of these cards will convert to regular, unsecured credit cards after 12 to 18 months of on-time payments. You can also get catalog cards, also known as store cards. You can get one of these at Sears, GAP, Home Depot, and so many other chain stores. Again, make sure that these cards will report to the credit bureaus, or they wont help you at all. And I cant emphasize enough that you need to actually use the cards, and pay always on time. If you dont use them, they wont build a credit history for you. A couple of months after you get catalog and secured cards (and if you always paid on time), you will start getting in your mail offers for more reputable unsecured cards, such as Visa and MasterCard. Start filling out applications for these. This is when your credit history will start building at a much higher pace. Get these cards one at a time. Remember that increasing your high credit limit all of a sudden doesnt do you any good. Apply for one, get approved, and pay on time. A couple of months later, apply for another one, get approved, pay on time, and so on.


Make sure you dont apply for those credit cards offers that sound too good to be true. If you get rejected, that will count as a hard inquiry on your credit report. If you are getting started with building your credit and you get an offer for a 0% interest card for the first 10 years and a limit of $50,000, well, it doesnt look like it is for real. Look for preapproved offers only. Be aware that a lot of companies use that term as a marketing tool, so make sure you read the small print before applying. There is a small trick that a friend of mine discovered almost by accident and shared with me. She called her credit card company to cancel her card, and the telemarketer talked her into staying with them by waiving the annual fee for her card and decreasing her interest rate considerably. The terms were great, so she stayed with this company. She then decided to cancel her other card, since she thought she had too many, and something similar happened: they offered to waive her annual fee and to decrease the interest rate. She then realized that she could get great deals by using this technique and all the credit cards companies except for one offered her much better terms. So there you go, try that if you dont want to waste your money paying unnecessary fees and high interest rates. And if you are getting started and you already have a couple of secured and catalog cards, remember to add some installment credit to your mix. You might not qualify for


a mortgage yet (maybe you dont even want to buy a home), but you are probably ready to apply for a car loan. If you have had some secured and catalog cards for a while (that you have been using) and you still didnt receive any unsecured credit card offer in your mail, you might want to contact Innovis Data Solutions. This company keeps consumer financial records, and they can filter you out from their databases causing you not to receive credit card offers- if they dont think you will be a good prospect for credit card companies. They might have some negative items on your credit history that dont show on the reports that the credit bureaus keep of you. To contact Innovis, visit their website:



Get Your Credit Reports The first step is to get your credit reports. The 3 of them: from Experian, Equifax, and TransUnion. Remember; get them mailed to you, since the online version is not as complete as the paper version.

Keep Records for at Least 7 Years Credit reports contain your financial information for the last 7 years. After 7 years, items disappear from your credit report and cannot be considered to calculate your score. That is the law. That is how the Fair Credit Report Act says it should be. That is why I recommend that you keep records for the last 7 years. When you dispute a negative item with the credit bureaus, you need to show proof. If you send them a letter saying I paid for this and you dont enclose any proof, they will disregard it. If you send them the same letter with a receipt where it shows you paid that bill on time, they will


remove the item from your credit score right away. Keep your records.

Why it is Not About Just Removing the Negative Items Remember we mentioned that poor credit is better than no credit? Adding positive items to your report is as important as removing the negative ones. Sometimes, there are neutral items that you will want to leave on your report. For example, if you had some late payments on your electrical bill, but then you brought it current; even if you find a mistake on the item, it may be convenient to leave it, or maybe request a correction of that item instead of deletion. Remember, it is not about deleting as much as you can.

Learn the Number One Rule You might have a number of negative items on your credit report that might be legitimate and you dont think you can dispute. Well, let me tell you a big secret. I want you to pay extra attention because this is what all the credit repair attorneys know but they never reveal: it is not about what is legitimate, but what creditors and the bureaus CAN PROVE is legitimate. You will find some negative items on your report. And you are guilty until you prove you are innocent. But if you dispute 33

the item, then the creditor or the bureau need to PROVE you are guilty. Do you see how it works? If they cant prove something, even if the item is legitimate, they need to remove it.

Choose Which Items You Will Dispute Lets say you have a collection account that was paid in full 2 years ago. It shows on your reports. In this case, you should probably not do anything about it, because even though there was a delinquency once on that account, you have proven to be responsible enough to pay it off. There is no rule to help you decide which accounts you should try to dispute and which ones you should not. Just use your common sense. It always helps to put in the shoes of a lender: If I were a lender evaluating offering a loan to this person, would I consider this account a positive or negative one? In addition, if there is a mistake that actually benefits you, such as a delinquency that shows it started 5 years ago and it was in fact only 2 years ago, dont do anything. Remember that after 7 years that item will disappear from your report, so if they say its 5 years old instead of 2, its better for you and you shouldnt ask for correction.

Perform Factual Disputes


Never dispute each single negative item on your report just because you dont want to see it there. There has to be a reason for you to dispute an item, or otherwise it will get verified and the bureaus will classify you dispute as frivolous and reject any further disputes for up to 12 months. For that reason factual disputes are the way to go. If your disputes are factual and the bureau does not make the necessary corrections or deletions, they have violated the FCRA and you now have some leverage. Without any violations, all you can do is file worthless complaints to regulators (who wont even bother to help you anyway). Believe it or not, most of the items on your credit report will either be incomplete or contain errors. And even if they are legitimate, DONT EVER ALLOW A NEGATIVE ITEM THAT IS INCOMPLETE OR CONTAIN ERRORS to stay on your credit report. It is imperative that you understand this. If you see a late payment from last year on your report and you know you did pay late, but the item doesnt show the payment date, dispute it! How can you know you were late if they are not giving you the payment date? Let me repeat what I said before: even if you know you were late on that payment, the entry has a mistake, so its your job to dispute it. Often times, creditors and the bureaus make mistakes, and that is exactly what you want, because if an item is incomplete or contain errors, it shouldnt be there.


The previous paragraph is probably one of the most important ones in this book. I encourage you to read it again. When you submit factual disputes, you need to include a letter explaining why you are disputing a certain item and attach evidence supporting your statement. For example, if it was a creditors mistake, have the creditor write a letter stating that it was their mistake. If they dont remove an item right away after you submitted a factual dispute, keep mailing them every month until they comply.

Learning the Different Kinds of Requests When you dispute an item, there are 2 things you can request: correction or deletion. If you think an item should be removed, ask for deletion. If you want it corrected, ask for correction. Let them know what you want them to do. If you just point out a mistake but dont specify what action do you want them to take, they will not do anything. There is a third kind of request: validation. Never ask for validation. What is the point of asking for validation anyway? I request validation for item number #####. And they will answer Item validated. We confirm it is correct. It just doesnt make sense. You dont have anything to gain.


Dispute the Most Harmful Items First There are 2 criteria you will need to use to establish which items you will dispute first: age and severity of the item. The older an item is, the less weight it has on your score. So, if you have 2 late payments (one from last year and the other one from 5 years ago), go after the newer one first. Severity of the item is a very important concept. If you have collection items on your reports, dispute those ones first. You will always have time later to chase the small stuff. A very important thing that you need to know is that collection accounts are allowed to be re-aged. Do you remember we mentioned that after 7 years all the items are erased from your credit report? Well, collections have an assigned date, and collection companies often sell or transfer your debt to other collection companies. And every time your account is assigned to a new debt collector, it resets its date on your credit report, and can stay there forever. Actually, debt collectors are very well aware of this and will do it to inflict the most possible pain until you pay your debt. So, dispute the most harmful items first and leave the small stuff for later.

Call the Creditor


I am impressed by how often people dont even consider this choice, although it is very powerful. It consists in calling the creditor (the company you owe money to) and negotiating a deal where you pay them whatever you can afford, and they report to the credit bureaus that the account is paid as agreed. Most creditors might not even think that you will ever pay, so if you call them and offer to set up a payment plan with them, they are likely to be very receptive. After all, you are giving them money, so why in the world wouldnt they take it? Sometimes, even if you have paid off the debt entirely, you can offer them some kind of incentive so they remove your negative item from your credit report forever. Again, you are offering them something, and they dont really benefit from damaging your credit, so they might as well take your money and help you clean your credit. I noticed that especially small companies are always willing to work something out with you if there is something in it for them.

It is important that you know all these techniques because you might use them at some point, but what you need to understand is that not everybody will need to use all of these strategies. I am just giving you the tools. Use only those tools that you really need.


Ask Some Companies to Report the Good Stuff Too As we mentioned earlier, your credit report doesnt only contain negative items. It can include accounts that show a status as paid as agreed and never late. Well, you can use this to your advantage. Call some companies you do business with (only if you always paid them on time) and ask them to report a good payment history to the bureaus. The truth is that most big companies wont even take the time to do it, but some smaller companies appreciate your business so much that they will be glad to do you a favor. Dont threaten anybody with taking your business somewhere else, just ask nice and you will be surprised by the response you get. Deposit Loans Deposit loans are a great option to build credit fast. You see, there is one kind of mortgage called SIVA, which stands for Stated Income Verified Assets. So you dont need to submit proof of your income but you do need to show proof of your assets. The way a deposit loan works is this: a lender will put some amount of money in a bank account in your name. It can be anywhere from $25,000 to $10,000,000. You


cant withdraw any of that money; it is just there to prove that you have assets. This is perfectly legal. And you pay 1% of that amount every month. Some lenders will require that you have the money seasoned in the bank account for at least 3 months. Having $25,000 in the account for 3 months will cost you $750, so it isnt very cheap, but you will have access to a mortgage that you otherwise wouldnt. And the other great aspect is that the payments for the deposit loans are reported to the credit bureaus as a current installment loan, which can skyrocket your credit score in just a few months.

Piggyback: Borrowing Somebody Elses Credit This is a really great strategy if you have a very thin or nonexistent credit history and want to improve it dramatically in almost no time. Nearly every credit card or credit account will permit the primary account holder to add on (at a later date) an authorized user or secondary account holder. In most cases, when this is done, the entire account history (retroactively) gets posted to the authorized users credit report regardless of their current age or credit history. This strategy has been used mostly by parents with their children, but it can be used by anyone. The key here is to find someone who trusts you and is willing to do this for you. It is not always easy, but you can ask them to add you as an 40

authorized user to their account and to have the card mailed to their address. You dont need it; you just need to benefit from their credit history.

Creating an Alternate Credit Profile Before you start reading this, let me warn you that there are many illegal ways to do this and we dont recommend any of them. Always stick to the law and you will get the best results. There is a legal way to create an alternate credit profile and it is so basic that often times it is overlooked by people with bad credit. It basically can be performed by creating a new legal entity: a corporation or LLC. At first, the new entitys credit will be linked to your personal credit, but using all the techniques explained on this book, you can build a strong credit history for the new company and it will eventually have credit of its own, and will not be linked to your personal credit records anymore.

Incorrect Legitimate Items Some items on your credit report can be legitimate (when the fact did happen), but the item is mistaken or has an 41

incomplete field. You are going to use these mistakes in your favor to clean your credit report. For example, if you paid a bill late and the creditor reported it but they forgot to mention the date of the late payment, you can dispute it. Their mistakes are your gain. It goes without saying that if an item is not legitimate, by all means you will want to dispute it. For example, if they report a late payment and you paid on time, it will be easy for you to get that item removed assuming that you have proof of your on-time payment. That is why I recommended you to keep records for the last 7 years.

The Process You want to dispute your items by mail. It is the easiest way. The envelope will contain the dispute letter, proof of what you are disputing (this is critical for success), and 2 forms of ID (drivers license and Social Security card, or any other kind of ID). Now, a warning about the letter: you dont want to sound like a lawyer. Dont try to threaten them. Dont waste your time explaining the law to them; it is a bunch of lawyers that you will be dealing with. They know exactly how this works. Dont dispute items if you dont have a reason for it (i.e. illegitimate, erroneous, or incomplete items). If you ask them to remove an item from your report just because you dont


want to have it there, they will laugh at you and they wont remove anything. OK, I just told you what not to do. Now let me explain exactly how to do it right. Send them a short, concise, and simple letter. It should have your contact information, the bureaus contact information, the date, the account or item number you are disputing, why you are disputing it, your name, Social Security Number, day of birth, and your previous address (if that is the address that shows on the report). I have included dozens of sample letters with this kit. Use them. Tweak them a little bit. The secret is that you dont want them to look as template letters. But you can definitely use them as a guide to write your own letters, or fill in the blanks and then change the format a little bit. That is all you need. Once you start reading the sample letters, you will realize how easy and simple they are. And you will notice that they cut right to the chase. They are short, concise, and powerful. Basically, you need to tell them what are you disputing, what is the reason for disputing it, and what action do you expect them to take (correction or deletion). And, of course, you want to include your personal information so they know who is writing the letter. There you go, that is the secret formula. Actually, the secret resides in submitting proof. Nothing can beat hard evidence. For illegitimate items, if they reported that an account was not


paid and you have the receipt that shows that you did pay, send the evidence or forget about seeing the item gone. If they didnt require proof, everybody would be disputing everything. It would be a big chaos. For legitimate items, look for mistakes or incomplete fields and just tell them item ##### doesnt show creditors name (or whatever mistake the item has). I request immediate removal.

Dispute 1 Mistake at a Time Lets say an item has 2 mistakes: the account number is missing and its a collection item with a credit limit (clearly, a collection account can never have a credit limit). Instead of sending a removal request mentioning both mistakes, mention just one, and see what happens. If they remove the item, then you are done. But if they didnt remove it (lets say they now included the account number), there is still 1 mistake and you can request a removal again. If you mention both mistakes on your first letter, they might correct both and now you have no reason to dispute it anymore. Keep in mind that you are dealing with people, and people make mistakes. Your creditor could have received the fax from the bureau asking them to update your account number, and someone at your creditors office could have


put that fax among a bunch of other papers and it got lost. It happens all the time. The bureau has by law 30 days to update the item or they have to remove it. Probably your creditors employees where oversaturated with work and didnt have the time to find your account number, write a letter for the bureaus and fax it. Great! Now the bureaus have to delete the item or they will be violating the Fair Credit Reporting Act. That is exactly why you want to dispute 1 mistake at a time. The more disputes you submit, the more chances the bureaus and your creditors have to mess up. And by now, you know how it works: if they mess up, you benefit. If you need to dispute different items, you can do it with 1 letter, as long as you dont dispute more than 1 mistake per item.

Mailing the Dispute Mail your disputes through USPS (United States Postal Services). Use their Priority Mail service. And pay attention to this: dont request a signature. The bureaus are overloaded with work and if they can avoid getting your letter, they will. Dont give them reasons to reject it. If you are going to send mail to your creditors, I recommend that you use First Class service. Never ever send original documents, always send copies.


Merged Accounts You first need to identify if your credit file has been merged with someone elses. The way to do it is by calling the credit bureau and asking them if there are any other sources of information linked to your account. It could be a spouse, exspouse, relative or a complete stranger. If so, request the files be separated. Their system contains a field called Additional Sources of Information. That field should be blank. Once those additional sources of information are removed, everything linked to that source should drop off your report. If the credit bureau is not helpful, then have a mortgage lender pull a tri-merge credit report. That will usually list the additional source of information. You can then dispute it with the credit bureaus. OK, lets start listing the most common mistakes you can find on your credit report and how to dispute them. Remember that you will find sample letters for all these situations, but before filling in the template letters you need to understand what you are doing. In each case I mention what kind of evidence you can submit to support your dispute, but you also need to use your common sense and make sure you are sending all the necessary documents to prove your case. It helps to ask yourself this: If I worked at a credit bureau, what evidence would I need to verify what this person is telling me?


Creditors Name Missing If your report shows a negative account but it doesnt say who you owe money to, how in the world are you supposed to know if the item is right or not? If you report contains an item that doesnt specify the creditors name, dispute it.

I dispute [name of account], account number [xxx]. This listing does not show the creditors name. I demand d l ti Account Number Missing Every creditor should assign you an account number. Without one, the item is incomplete and you should dispute it.

I dispute [name of account], account number [xxx]. This listing does not show the account number. I demand d l ti 47

Blank Fields No blank fields are allowed on your report. If a certain field doesnt apply, it should show N/A. If its blank, dispute the item.

I dispute [name of account], account number [xxx]. This listing does not showing the date opened. I demand d l ti Inconsistencies You want to look at each derogatory across all the 3 credit reports to find inconsistencies. If you find different dates, balances, or any other inconsistencies on derogatory accounts, consider contacting the original creditor for documentation. If the inconsistency was on the Experians report, for example, submit a copy of your report from the other 2 credit bureaus showing the accurate information to prove your dispute.


Lets say the first report is from Experian and the second one from TransUnion. You can see the inconsistency on the Date Opened field. In this case, contact your creditor to find out which date is accurate, and request correction if it will benefit you. I dispute [name of account], account number [xxx]. The date opened is 12/1993, not 12/1999, as shown in the evidence attached. I demand deletion.

Incomplete Item Sometimes, a derogatory item doesnt show required information, such as dates, balances, etc. In this case, you want to dispute the incomplete item.


I dispute [name of account], account number [xxx]. This listing is incomplete; the High Balance is missing. I demand d l ti Wrong DOLA (Day of Last Activity) The day of last activity is a time stamp of when the account was last permanently delinquent. We mentioned before that items will stay on your report for 7 years. Some companies play dirty and do what is called re-aging an account. If you notice that they report a wrong DOLA, you can get the item deleted. These companies re-age accounts for 2 reasons: they want to hurt your credit as much as they can by keeping your delinquent account forever on your report, and the second reason is that newer accounts are easier to resell to debt collectors. Think about it: if an account is 6 years old, you know that if you dont pay for it, it will be gone from your report in 6 months anyway. But if an account is just 1 year old, you have a bigger motivation to pay, or otherwise that item will be on your report for 6 years. Remember that the only accounts that can be re-aged are collections, since the date for these accounts resets every


time your debt is transferred from one debt collection company to another. That is why collection delinquencies are the first thing you need to take care of. Dont forget to submit proof of the actual DOLA if you have it. Only Equifax reveals the DOLA. For TransUnion and Experian, there is still a way you can estimate them. On TransUnion reports, take the Estimated date when this item will be removed and count back 7 years. On Experian reports, if you have an account listed as a Charge off as of Jun 1997, count back 6 months. If you have different DOLA for the same item from different bureaus (and the difference is significant), chances are they have re-aged the items. The oldest DOLA will be the correct one, since it is very common for creditors to re-age items, but inverse re-aging almost never happens. Contact your creditor and ask them for a letter stating the right DOLA and write a dispute to the bureaus sending them a copy of the letter your creditor issued you. I am disputing the date of last activity for account number [xxx]. It has been re-aged. Please delete this

Balance is Higher than High Balance


The balance is what you currently owe. The high balance is the most you ever owed. If we are talking about a credit card, the high balance is the biggest balance that card ever had. Obviously, the current balance cant be higher than the high balance. Dispute your item if you find this mistake.

I am writing to dispute an account thats showing a balance thats higher than the high balance. Enclosed is a copy of the report with the item circled. Please delete it

Incorrect Credit Limit If you have a $10,000 limit for one of your cards and the limit shown on your report is different, send the bureaus a credit card statement where it shows what your real limit is, along with the proper letter, and ask for correction. Remember, the bigger your high credit limit is, the better your score. So if your report shows a limit of $20,000 instead of the actual $10,000, dont do anything; you will benefit from it.


I dispute [name of account], account number [xxx]. This listing shows a credit limit of $[xxx] and it should be $[xxx]. Enclosed is a copy of my last credit card statement showing the correct credit limit. I demand correction. A Collection Item Has a Credit Limit This happens very often and is a mistake you will easily get your item removed or corrected over. A collection account cant ever have a credit limit. It is not a credit card. Dispute it.

I dispute [name of account], account number [xxx]. This listing is showing a credit limit of $[xxx]. How can a collection item have a credit limit? I demand deletion.

Delinquencies After Closing Date


An account cant show delinquent activity after its closing date, or the day when it was charged-off. If the date when the account was closed or charged off is not on your credit report, you will have to write the creditor. Supporting evidence will make the difference between deletion and correction. With or without evidence, factually dispute the late-pays after the closed date. I dispute [name of account], account number [xxx]. This account was closed on [date], but is showing delinquent activity after the closed date. Your procedures have allowed this since [date closed or charged-off] and this has been highly damaging to me. I want this account Undated Late Payments This is a very common mistake. How could you know if a payment was late if it has no date? Dispute it. The following listing is incomplete: [name of account] / [account number]. I am disputing this account due to the fact that its listing an undated late pay. Please delete it.

Incorrect Account Types If a charged-off account shows as open, it is clearly a mistake. It should show Closed Account, Charged-Off, or not show an account type at all.


I am writing concerning the following account: [account name] / account number [xxx]. I am disputing the account type. Its inaccurate. A charged-off or closed account cannot be an open account. Please delete it.

Date Verified Did Not Update When you dispute an item and a bureau verifies it, the Date Verified field should update. If it doesnt, it means that they didnt really verify it, which is a violation and you have to request immediate deletion.

On [date] I disputed [account name], [account number]. You [date] disputed [account name], [account number]. On verifiedI the item as accurate. The [whatever the DU is named for the bureau accurate. did not change. No You verified the item asin question]The [whatever the DU is investigation was actually done. Delete the item. named for the bureau in question] did not change. No investigation was actually done. Delete the item.


Account Included in Bankruptcy Shows a Balance If an account was included in a bankruptcy, its balance should be zero or N/A. If not, dispute it.

The balance for account number [xxx] is inaccurate. Please delete this item.

Account Included in Bankruptcy Shows as Open If there is a certain item that you included in your bankruptcy, it shouldnt show as open anymore.

The account type for account number [xxx] is inaccurate. An item included in bankruptcy cant be open. Please

Item Not Yours


Before disputing an item as not mine, first make sure that you never had a business relationship with that company. Even if the name of the company doesnt sound familiar, call the phone number on the report and ask them to check out who they are. The reason why, is that some companies have a commercial name that is different from their legal name. Their commercial name can be The Shoe Planet, and the legal entity behind is Oklahoma Shoe Distribution Inc.. If you did have a business relationship with that company in the past but you are positive that you have no outstanding debt with them, call them. They might have messed up and they now have to contact the bureaus and get the item removed. Even if they promise to do that, ask them to send you a letter stating that it was a mistake and mail it to the bureaus along with another letter explaining what happened and requesting deletion. If you do it yourself, you have the peace of mind that has been done.

I am writing concerning the following account: [account name] / account number [xxx]. I am disputing item. It is not mine. Enclosed is a letter of the creditor admitting the

Account Sold or Transferred With an Outstanding Balance


If there is an account that was transferred from the company XXX to the company YYY, then your outstanding balance with XXX should be zero or N/A, that is if it shows on your report at all. If you owe the first company $5,000, they transfer your debt to the second company, and it shows that you owe $5,000 to each, request immediate removal. I dispute [name of account], account number [xxx]. The balance is incorrect. Please delete.

You might have noticed that I always use very straightforward wording. That is the way to go. Short, simple, and concise. Tell them what is wrong and what you want them to do about it. Thats it. Also, dont try to explain the whole situation. Write as little as possible. In the last case, you could see how I just told them that the balance was incorrect. I didnt explain that it could be because my account was sold or transferred. You just let them know that a certain item is not correct. Its their job to find out why. If they dont, they are breaking the law.

After you submit your dispute, the credit bureaus have 30 days to investigate it and take action (verification, deletion, 58

or correction). It is the law. If they dont comply with this, they will be violating the FCRA and now you have some leverage. Send them a letter letting them know that they have violated the Fair Credit Reporting Act and request immediate removal. It is important that you know the rules because you will need good information to fight these guys. If the item gets verified within 30 days, you can ask them what verification method did they use and where did they get the information from. On [date] you verified a public record I had disputed. It was a [type of public record] reported/filed on [date]. I am now requesting the method of verification, including the name and address of the furnisher of information. Never threaten the bureaus. Do you know how many letters a day they get from people saying that they will sue them? Dont go there; its a waste of time. Something else you dont want to do is writing the Attorney General or the Federal Trade Administration. You will just waste your time and postage money. If you dont have the time or just dont want to deal with this yourself, you can use a credit repair company. I listed a couple of them in Part 5 of this book.


Two more pieces of advice before we go to the next chapter: the first one is to get always every statement in writing. If a creditor tells you that your debt has been paid off, you inform that to the bureaus, the bureaus contact your creditor, and your creditor denies it, you have nothing to prove that your creditor said what they said. Always, always get everything in writing. The second advice is to always contact creditors if you didnt find any mistake with any given item. The creditors, especially if they are a small company, might have reported your case to the bureaus and then got rid of the documents and have no records of your debt. If this is the case, contact the bureaus and ask for deletion, since its against the law reporting an item without proof of the delinquency.



All the Secrets to Negotiate With Creditors and Save ThousandsofDollars
It is a good idea to call your creditors before you send them mail. The truth is that they will welcome you if you want to work out some sort of payment schedule. Chances are they considered your debt as a loss and thought they were never going to see a penny from you again. You have a lot of leverage in these negotiations, since you wont pay unless they accept your conditions. There is a rule of thumb that works very well: offer to pay them 20 cents on the dollar. If you owe them $100, offer them $20. They will ask for more, but you can usually get them to report your account as paid in full as agreed for 25% to 35% of the original debt amount. Also, set up a payment plan of $200 a month for every $10,000 you owe them. This approach works like a charm. Stay away from debt consolidations companies. They all say that they have special relationships in the collection industry and can get you amazing discounts on your debt amount. This is not true. All they have is a computer system with the same sample letters I give you with this book. Debt 61

consolidations companies will negotiate the interest on your debt, but not how the principle, and that is the main reason why you dont want to work with them.


The first advice I will give you is that it is better to be safe than sorry. Be very careful with who you give your SSN to, and keep it as secret as possible. If you use online banking and your name is John Smith, dont pick up passwords like johnsmith, jsmith, smithjohn, etc. Try to use a combination of random letters and number so nobody can guess it. When you receive those emails asking you to log in to your PayPal account (or even worse, your bank account), ignore them. They are always scams. If its already too late and your ID has been stolen, follow these steps: 1. Place a fraud alert on your credit reports and review your credit reports. Contact any one of the nationwide consumer reporting companies to place a fraud alert on your credit report. Fraud alerts can help prevent an identity thief from opening any more accounts in your name. The company you call is required to contact the other two, which will place an alert on their versions of your report, too.


Equifax: 1-800-525-6285; Experian: 1-888-EXPERIAN (397-3742); TransUnion: 1-800-680-7289; In addition to placing the fraud alert on your file, the three consumer reporting companies will send you free copies of your credit reports, and, if you ask, they will display only the last four digits of your Social Security number on them. 2. Close the accounts that you know, or believe, have been tampered with or opened fraudulently. Contact the security or fraud department of each company where you know, or believe, accounts have been tampered with or opened fraudulently. Follow up in writing, and include copies (not originals) of supporting documents. It's important to notify credit card companies and banks in writing. Send your letters by certified mail, return receipt requested, so you can document what the company received and when. Keep a file of your correspondence and enclosures. When you open new accounts, use new Personal Identification Numbers (PINs) and passwords. Avoid using easily available information like your mother's maiden name, your birth date, the last four digits of your Social Security number, your phone number, or a series of consecutive numbers.


3. File a report with your local police or the police in the community where the identity theft took place. Get a copy of the police report or, at the very least, the number of the report. It can help you deal with creditors who need proof of the crime. If the police are reluctant to take your report, ask to file a "Miscellaneous Incidents" report, or try another jurisdiction, like your state police. You also can check with your state Attorney General's office to find out if state law requires the police to take reports for identity theft. Check the Blue Pages of your telephone directory for the phone number or check for a list of state Attorneys General. 4. File a complaint with the Federal Trade Commission.

By sharing your identity theft complaint with the FTC, you will provide important information that can help law enforcement officials across the nation track down identity thieves and stop them. The FTC also can refer your complaint to other government agencies and companies for further action, as well as investigate companies for violations of laws that the FTC enforces. You can file a complaint online at If you don't have Internet access, call the FTC's Identity Theft Hotline, toll-free: 1-877-IDTHEFT (438-4338); TTY: 1-866-6534261; or write: Identity Theft Clearinghouse, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580.


I highly recommend you to complete and file an ID Theft Affidavit. You can find it here:

There is something that most people dont know about collection agencies and I am about to reveal it. You have no obligation to deal with them. So, when they call you requesting payment, you can politely say thank you, but I dont want your business. It is that simple. They are a company, you are a customer. Nobody can force you to do business with them. They can invite you, but you have no obligation to accept their invitation. Lets say your cell phone service provided by T-Mobile. This company has the right to collect money from you. If you dont pay, they can call you and demand payment. But if Debt Collectors Inc. calls you to get money from you on behalf of T-Mobile, you have the right to say I dont know you, I dont want to do business with you, I owe money to TMobile, not to you. Dont call me anymore. There is one exception to this rule, and that is when you signed a contract stating that in case of delinquency, Debt Collectors Inc. has the right to collect the payments on behalf of the company you are doing business with. 65

If you accept the business of the collection company, make sure they dont bully you. If they use aggressive techniques to get you to pay, you can sue them. Some of the nonaccepted practices could be: threatening to hand your case over to their legal department when they dont have one, sending mail pretending to be attorneys, calling before 8 AM or after 9 PM, calling several times, etc. If they do that let them know that they are breaking the law and sue them if necessary.

How to Achieve a 700CreditScore Within 36 Months of FilingforBankruptcy

When you file for bankruptcy it will show on your credit report for up to 10 years and will also become a matter of public record. But it is not the end of the world. Far from it. You can file for either Chapter 7 or Chapter 13. If your income is above the median for your state and you can make payments of at least $100 a month, you will have to file for Chapter 13, since you wont qualify for Chapter 7. But most attorneys will still recommend filing for Chapter 7 first. I am not qualified to give legal advice, so by all means go to see an attorney before filing for bankruptcy. The good news is that you can start creating a good credit profile even before applying for bankruptcy. Create new


accounts, pay them on time and dont include them in the bankruptcy. You will notice that after filing, you will have a couple of accounts with impeccable payment history. In addition, after bankruptcy you are debt-free. That means that a lot of lenders and credit cards companies that specialize in high-risk markets will approach you with credit card offers, which is exactly what you need to start rebuilding your credit history. However, be prepared to pay high interest rates, so keep the balances of your new credit cards very low. Follow the advice in this book to start creating a good credit history from scratch. If you do this, dont be surprised if within 3 years of filing for bankruptcy you have a credit score of 700 or higher. Ive seen it happen again and again.

ChexSystems is a check verification service and consumer credit reporting agency like Experian, Equifax and TransUnion. While most credit reporting agencies broker data about how a consumer handles credit relationships, ChexSystems provides data related to how a consumer has handled deposit accounts at banking institutions. ChexSystems works under the FCRA rules, just like the credit bureaus. And the process to dispute items on your report is


pretty much the same. First, you need to request your report. You can get 1 for free ever 12 months. Request it by phone by calling 800-428-9623, by fax: 602-659-2197, or mail: ChexSystems Inc., 7805 Hudson Road, Suite 100, Woodbury, MN 55125. Once you have the report, dispute the negative items factually, just like you would do with Experian, Equifax, or TransUnion. The most common items on a ChexSystems report are NSF (non-sufficient funds) and non-paid overdraft fees. With ChexSystems your negative items will stay 5 years on your report instead of 7, so thats good news. For a free list of banks that dont check the ChexSystems database and will open an account for you even if you are in ChexSystems, visit this website: You can also check

In case you dont have the time to repair your own credit or just dont want to, there are some really good credit repair agencies out there: Onyx Legal Credit Repair 888-322-3643 68

Buena Vista Credit 888-235-8056 Veracity 866-383-1801 Lexington Law 800-458-5202


You will find in this kit some bonuses I added as a way to say thank you for reading this book. Sample Letters I have included over 30 sample letters to send to the bureaus, creditors, and collection agencies. Just fill in the blanks, personalize them a little bit and mail them. It is really simple. Some of the template letters you will find in the CD included in this kit are: o Sample Template Letter to Credit Bureaus o Sample Template Letter to Creditors o Free Credit Report Request o Credit Report Purchase o ID Theft Alert o ID Theft Alert Removal o ID Theft Alert Extension o Incomplete Report of Item Dispute o Incorrect Credit Limit Dispute o Incorrect Balances Dispute


o Delinquency or Past-Due Amounts After Account Closed or Charged-Off Dispute o Undated Late Pays Dispute o Incorrect Account Type Dispute o Wrong or Re-Aged Date of Last Activity Dispute o Date Updated / Date Verified Discrepancy Dispute o Item Not Included in Bankruptcy Dispute o Incorrect Balance Bankruptcy Dispute of an Item Included in

o Re-Aged Date of Last Activity for an Item in Bankruptcy Dispute o Day of Last Activity Follow Up to Verification o Burden of Proof on The Credit Bureau o Request for Method of Verification o Follow Up for Method of Verification o No Response to Request for Method of Verification o Judgment and Tax Liens o Collection Agency Credit Bureau Dispute o Investigation Results Dispute o Inaccurate Late Pay o I dont want your business to Debt Collectors 71

o Sample Validation Example if Creditor Has No Documentation o Statute of Limitations Expired o ID Theft to Creditors o Request of Documentation from Creditor o Unauthorized Inquiry by Creditor o Unauthorized Inquiry by Debt Collector o Unauthorized Inquiry by Debt Collector After I dont want your business Letter o Follow Up to Unauthorized Inquiry Letter o ID Theft Letter to Credit Bureaus About Fraudulent Account o ID Theft Letter to Creditors or Debt Collectors About Fraudulent Account o ID Theft Affidavit o Cease and Desist (Phone Calls Only) o Cease and Desist Correspondence) o Cease and Desist (All) (Phone Calls and

Interviews with Credit Repair Experts


All the insider secrets from the most successful credit repair attorneys in the industry. They have been fixing credit reports for years, day after day, and now they are going to reveal all the things you ever wanted to know about your credit score. Find the audio interviews in the CD included with this program.

How to Make $60,000 a Year Fixing Credit Reports Part-Time Maybe you already thought about this while you were reading the book. Four hours ago you were in the dark as far as credit scores concern. You knew nothing about them. Now you are almost an expert. You have the necessary knowledge to help other people overcome their credit problems. Here are some ideas to get started. The first thing I encourage you to do is to fix your own report. After that, offer your spouse, other family members, and some friends your service for free. There are 2 reasons for this: the first one is that you really want to learn the process before you start charging for your service. The second reason is that these people will be so happy that you helped them get a better score for free that they will refer a bunch of people to you. Once you are already established and you know what you are doing is time to start promoting yourself. I recommend that you think of a promotion as a 2-step process. The first 73

step is creating your marketing message and the second step is delivering it. Create an amazing message and I can assure you that you will have to spend half as much time promoting yourself and will have twice as many clients. You need to decide if you want to offer a one-time repair service, an ongoing maintenance, or both. Then you need to think about your clients and ask yourself some questions: why would someone want their credit report fixed?, what is the biggest motivation for someone to improve their credit score?, etc. You need to understand why someone would hire your services in order to elaborate your marketing message. After you have done some research, I suggest that you create a sign with your marketing message. It doesnt have to be flashy; just make sure you communicate your message clearly. That will force you to think about the benefits you can offer to your clients and the reasons you will give them to get their credit repaired by you. This is just an example of what this should look like. Feel free to copy some of these ideas if you want.


This is far from being the best sign that you can ever make, but the point here is that you fine-tune your message. How are you going to communicate your service? You will have to answer 2 questions: why do people need to improve their credit score? and why should they do it with you? If you can successfully answer both questions in your 75

message, you will have almost guaranteed success. That is, if you also get really good at the second part of this process: delivering your message. This is not rocket science. Its just common sense. Ask yourself this question: where can I find people with the problem I offer the solution for? You have to know who they are, where you can find them, and how you can reach them at a low cost. The first thing that comes to my mind is to go visit some mortgage brokers and car dealerships. These guys turn down dozens of people every day based on their bad credit. What if the next time they turn someone down they give them your card and recommend them to go see you, fix their credit, and come back in a couple of months for a guaranteed approval? The broker or car dealer will feel good about it because they will be offering their clients a service that will benefit them. If their clients get their credit repaired they can buy their product later on (mortgage, loan), and you can compensate them with a percentage of each referrals fee. Everybody wins. That is, in my opinion, the most powerful and cost-efficient marketing tool: going to get the customers where the customers are. In addition to that, there are many other things you can do: list a small classified ad in your local newspaper, buy a listing in the Yellow Pages, put a sign on the message boards of your local grocery stores and colleges, etc. If you are really 76

good at what you do, word-of-mouth will do the rest of the work. How much should you charge? I recommend that you to call some national credit repair agencies and ask them how much their services run for and charge a similar amount. You cant offer many years of experience yet, or fancy offices, or nationwide reputation, but you can offer something that these big guys sometimes cant: personal attention, one-on-one customer service. That is priceless. When you are start making a bunch of money, dont forget to send me 10% of it!


First of all, I want to say thank you for buying and reading my book. I hope I could help you to understand how the credit world works, and I dont have any doubt that if you follow the advice given in this book you will radically improve your credit score. Thank you again. Have a great life and a great credit score! Chris Linus