Your Credit Repair Companion

1.  The Elements of Repairing Credit

2.  Credit Reports and Credit Scores: The Nuts and Bolts

• How Creditors Evaluate Your Creditworthiness
• Credit Reports and Credit Scores: What’s the Difference?
• Your Credit Report
• Getting Your Credit Report
• What Is in a Credit Report?
• Investigative Reports
• Who Can Look at Your Credit Report
• Your Credit Score: What It Is and Why It Matters
• How Credit Scores Are Calculated
• What Credit Score Do You Need to Get Credit?
• Getting Your Credit Score

3.  The First Step to a Better Credit Score—Cleaning Up Your Credit Report

• Common Errors in Credit Reports
• Your Right to an Accurate Credit Report
• Review Your Report for Errors and Incomplete or Prohibited Information
• Dispute Incomplete and Inaccurate Information
• Add an Explanatory Statement to Your Credit File
• Add Positive Information to Your Credit Report
• Check Your Credit Reports Often
• Avoid Credit Repair Clinics

4.  Assess Your Financial Situation

• How to Assess Your Financial Situation
• Determining Your Credit Repair Options Based on Your Financial Situation

5.  Reducing Current Expenses and Debts

• Cutting Expenses
• Reducing Current Debt Obligations
• Reducing Mortgage Debt
• Filing for Bankruptcy

6.  Finding Money to Pay Your Debts

• Ways to Raise Money
• Options to Avoid

7.  Negotiating With Creditors and Debt Collectors

• Prepare a Negotiating Plan
• Negotiating With Creditors and Debt Collectors
• Dealing With Debt Collectors
• Tax Consequences of Forgiven Loans

8.  Getting Help to Negotiate and Manage Debts

• Avoid Most Debt Relief Services
• How Does a Debt Management Plan Work?
• Debt Management Plans vs. Chapter 13 Bankruptcy
• Choosing a Good Credit Counseling Organization
• After You’ve Chosen an Agency, Monitor Your Plan

9.  Building Positive Credit History

• First Steps to Rebuilding Credit
• Ways to Improve Your Credit History Without Getting New Credit
• Next Steps to Rebuilding Credit—Getting New Credit
• Putting It All Together: Preventing Future Financial Problems
• Be on Guard for Credit Discrimination

10.  Choosing and Using Credit Cards

• Choosing Credit Cards
• Using Credit Cards: How to Protect Yourself

11.  Avoiding and Dealing With Identity Theft

• The Crime of Identity Theft: The Scope of the Problem
• What’s in a Stolen Name?
• How Can an Identity Be Stolen?
• How to Protect Yourself
• Protecting Your Social Security Number
• If Your Identity Is Stolen
• Identity Theft Protection Products and Insurance

Appendix A: Resources

• Debtors Anonymous
• Nolo Publications
• Other Publications
• Online Resources
• Where to Complain: Federal Agencies
• State Consumer Protection Agencies

Appendix B: Forms and Letters

• Form F-1 Request Credit Report
• Form F-2 Request Reinvestigation
• Form F-3 Request to Furnishing Creditor to Reinvestigate
• Form F-4 Request Follow-Up After Reinvestigation
• Form F-5 Request Removal of Incorrect Information by Creditor
• Form F-6 Creditor Verification
• Form F-7 Request Addition of Information Showing Stability
• Form F-8 Request Addition of Account Histories
• Form F-9 Monthly Income
• Form F-10 Your Debts
• Form F-11 Daily Expenses
• Form F-12 Payments to Savings and Debt Reduction
• Form F-13 Monthly Budget
• Form F-14 Inform Creditor of Judgment Proof Status
• Form F-15 Request Short-Term Lower Payments
• Form F-16 Request Long-Term Lower Payments
• Form F-17 Request to Pay Nothing Short-Term
• Form F-18 Request to Pay Nothing Long-Term
• Form F-19 Request Rewrite of Loan Terms
• Form F-20 Offer (Delayed) Payment of Past Due Amounts
• Form F-21 Offer (Reduced) Lump Sum Payment
• Form F-22 Offer Payment Schedule to Pay Off (Reduced) Debt
• Form F-23 Cashing Check Constitutes Payment in Full (Some States)
• Form F-24 Cashing Check Constitutes Release of All Claims
• Form F-25 Offer to Give Secured Property Back
• Form F-26 Request Direct Negotiation With Creditor
• Form F-27 Request for Verification of Debt/Identity of Original Creditor/Return of Debt to Original Creditor
• Form F-28 Complaint About Debt Collector Violation of Law
• Form F-29 Debt Collector: Cease All Contact
• Form F-30 Request for Basis of Unfavorable Credit Offer or Action
• Form F-31 Identity Theft Dispute Letter for Existing Accounts
• Form F-32 Identity Theft Dispute Letter for New Accounts

Appendix C: Additional State Protections Concerning Credit Repair Clinics

Appendix D: How to Use the Downloadable Forms on Nolo.com

• Editing RTFs
• Downloadable Forms Available on the Nolo Website

Index

Chapter 1:
The Elements of Repairing Credit

Credit repair is not a quick fix. If you are serious about improving your credit, you’ll have to make a commitment and then follow the steps discussed in this book. Some of these steps require time and hard work to complete, others you can do fairly quickly. And for some, you might have to wait until your finances are under better control before you dive in. With each step, we walk you through the various options and warn you away from alternatives that could make your situation worse. And throughout the book, we provide sample letters and forms that you can send to creditors, debt collectors, credit reporting agencies, and others to aid in your credit repair efforts.

First steps: 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 how it relates to your credit history. Start by understanding your credit reports and credit scores: what’s in them (and what’s not), how your credit report controls your credit score, and essential factors involved in credit scoring. Chapter 2 tells you how to get your report and score and how to review them. Chapter 3 explains how to fix errors and other problems, and how to add positive information to increase reporting accuracy.

At this point, you must also analyze your current debts, income, and expenses, prioritize your bills, and create a budget to put them in balance. With this information, you can better determine whether it’s time to implement credit repair strategies or whether you should take care of some other financial emergency first.

Next steps: Getting your income, debts, and expenses into balance (Chapters 5 and 6). Often the most direct way to improve your credit is simple: Pay your bills on time. But it’s also one of the hardest things to do after financial problems have set you back. The next steps involve bringing your expenses and debts into balance with your income so that you can meet your debt obligations, and start saving some money. We look at ways to make significant reductions in debts (including your mortgage) and other expenses and ways to find more money to pay down debts. You will also learn about different methods of dealing with debts such as foreclosure and bankruptcy—and how each will impact your credit history. As you explore these options, the book steers you away from the minefield of scammers ready to take your money and derail your credit repair efforts.

Paying and negotiating debts (Chapters 7 and 8). Whether you’re trying to reduce your debts enough to be able to pay current bills on time, or you are ready to tackle paying off debt, you will likely need to flex your negotiation muscles to achieve your goals. By negotiating with creditors and debt collectors, you might be able to settle debts, get better payment terms, and improve how your creditors report debts to credit reporting agencies. In Chapter 7, you’ll learn how to set negotiation goals, ways to negotiate, how the debt collection business works, and what debt collectors can and cannot do.

If you want help in talking to creditors, or in setting up a debt repayment plan for all or most of your debts, Chapter 8 explains your options. You’ll also learn how to find legitimate credit counseling and debt relief services and how to avoid the rest.

Stepping toward the future: Rebuilding and protecting your credit profile (Chapters 9, 10, and 11). At this point, we turn the corner and concentrate on how you can start to rebuild your credit. Chapter 9 recommends ways to build (or rebuild) your credit profile without getting additional credit. And when you’re ready, it helps you figure out how to get and start using credit again, how the different choices may affect your credit history and credit score, and how to avoid credit discrimination.

Because credit cards are a big part of rebuilding credit for many people, Chapter 10 provides information on how to choose and safely use credit cards and debit cards. Finally, Chapter 11 provides information on how to reduce the risk of identity theft or what to do if you become a victim, so you can keep your credit secure after all your hard work.

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