PSYCHDOC'S CREDIT REPAIR SCHOOL FOR BEGINNERS

by Randy Padawer (PsychDoc)...

CREDIT 101: The Ethics of Credit Repair, 9/8/2005

CREDIT 102: A Consumer Law Overview, 9/22/2005

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

CREDIT 104: Triaging Your Reports, 10/20, 2005

CREDIT 105: FCRA Street Fighting, 11/3/2005

CREDIT 106: FCBA Street Fighting, 11/17/2005

CREDIT 107: FDCPA Street Fighting, 12/1/2005

CREDIT 108: Small Claims Lawsuits, 12/15/2005

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LESSON ONE TRANSCRIPT

CREDIT 101: The Ethics of Credit Repair, 9/8/2005

First, when we talk about credit repair we're talking about a number of things

really. Is credit repair about making your credit report more accurate? Is credit

repair about "fixing" your credit report? What's credit repair? Is credit repair

about getting better rates on loans? Getting credit cards? Buying a car? Is credit

repair about debt negotiation? Debt reduction? Debt elimination? Learning tricks

to improve your credit score? When you talk about getting your life back in order,

I'm guessing that (like me at one time) bad credit has caused some heartache for

you!? I remember when I couldn't buy a car... We'll touch on all of these during

the next few weeks, but the emphasis will be upon removing negatives from your

credit report. When negatives peel away, your credit score typically improves.

And when that happens, you'll get better rates on loans. Moreover, as a happy

consequence of confronting what's on your credit report, you may find that

alleged (I'll explain that adjective in Lesson 7) creditors may forgive alleged

debts. But debt forgiveness is a possible symptom. My emphasis is about your

credit reports. Everyone has to define their own emphasis though. I've done

some writing and seminar facilitation for The Motley Fool (Fool.com), and I got

into a bit of trouble as a result of that involvement one fine autumn day a couple

of years ago. Equifax was (and maybe continues to be) an advertiser with their

website, and they didn't much like it when I wrote stuff like this... to quote...

"There are a few hardball tactics which you can use with the bureaus and

creditors that will compel them to remove negative tradelines, irrespective of

accuracy, from your credit reports." Basically, Equifax contended that I was

breaking the law when I made that statement, and my Foolish colleagues agreed.

So we watered down my statements a bit. We gave in. We caved. We sold out.

QUESTION for discussion... Does anybody know how my statements may have

constituted lawbreaking? anybody know why Equifax thought I'd broken the law?

all of us who tell another human being is defined as a CRO by federal law...

crazy huh Section 404 ("Prohibited Practices") of the Credit Repair Organizations

Act (CROA) reads, "No person may..."Now before I say another word, note that

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CROA doesn't say, "No credit repair organization may..." or even "No

organization may..." Rather it says, "No person may..." and continues "make any

statement, or counsel or advise any consumer to make any statement, which is

untrue or misleading... with respect to any consumer's credit worthiness, credit

standing, or credit capacity to... any [credit bureau]... or any creditor." it almost

seems to violate the First Amendment! Nobody's ever challenged that incourt. I

think it would fall flat. But... As I sit here tonight I am a CRO of one person.

Equifax basically said that the phrase "irrespective of accuracy" meant that I was

advising people to disregard the truth when making statements about

themselves, that this violated federal law, and that if I didn't revise my tune they

might not be interested in advertising with The Motley Fool anymore. Guess

what? Equifax was wrong. There ARE some things which may compel a credit

bureau or creditor to remove items from a credit report IRRESPECTIVE OF

ACCURACY... and YOU DON'T HAVE TO TELL LIES in order for that to happen.

In fact, let me say it more plainly...I call these PSYCHDOC'S FIVE BASIC

CREDIT REPAIR PRINCIPLES...

1) You should always TELL THE TRUTH when communicating with credit

bureaus and those companies which report to them.

2) Telling the truth is usually more INTIMIDATING to those entities.

3) Telling the truth is almost always more EFFECTIVE vis-a-vis your goals.

4) Credit repair involves INTERVENTIONS which invoke one of three

TRUTHFUL communication tactics: a) polite requests, b} requests for

information, and c) legal demands. and the last one...

5) Credit repair involves leveraging your FEDERAL CIVIL RIGHTS in the service

of improving your credit rating.

Another quick definition... I use the word INTERVENTION a lot. Basically a credit

repair intervention is anything you do to intervene against the current credit

status quo. Interventions include credit bureau disputes, goodwill requests,

escalated information requests (which include creditor-directed communications

like the "Nutcase" series and other effective tactics), formal requests for

validation, and more. Such interventions usually take the form of things like hard-

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copy letters [best], internet-based communications [sometimes ok, depending],

phone calls [iffy], smoke signals [forget it], etc. I've been asked... Well, gee whiz,

how can one dispute a negative that is accurate with a credit bureau without

telling a lie? As an aside right now, though, does anybody have any ideas how

one can dispute an accurate negative listing without lying? Discussion

question...we'll definitely have a hard copy discussion ... how can one dispute an

accurate negative without lying? any old-timers care to chime in? well... smile.gif

well, what if it's yours? What if something is yours on your report, and it is

reported as late because it was truly late...We'll explore ETHICAL DISPUTING

examples more fully in the fifth lesson (CREDIT 105: FCRA Street Fighting) For

now, consider this: In the case of credit bureau disputes, it's the difference

between saying, "The Sears tradeline (account 12345) is not mine" versus

"Provide documentation that the Sears tradeline (account 12345) belongs on my

credit report and that my rights have not been abrogated. Otherwise please

delete this damaging data." When you say, "It's not mine" (and it's yours), you're

treading some really rough territory. The bureaus don't want to get a

letter from somebody who knows their rights and who can spell out what it is

they need to do. Now, many people have achieved great results saying, "not

mine. The problem comes later... if indeed you wanted to take the bureau to

court. You want your documentation with them to be 100% honest and on the

mark. I sued all three CRAs in small claims court a few years ago. It wasn't as

tough as that sounds, ha. But that's not where this lesson is heading. We'll talk

about small claims in Lesson 8. Will provide some letters, templates, etc. With

inquiries... I would say "Please show documentation that the creditor gave

evidence of their permissible purpose when requesting access to my report.

Otherwise you are bound by federal law to remove this inquiry now. I have

ALWAYS contended that truthful words are more intimidating than a simple lie.

The CRAs read lies all the time. But a carefully written letter that reveals the

writer to be educated to their rights...is far worse for them potentially. The same

logic applies to creditors as with CRAs. You're presenting yourself as someone I

like to term "a litigious nutcase"... but you're not shouting...you're not being

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impolite... you're not making accusations... and you're not telling lies. In fact...

The truth is in the asking If you look back over this transcript in the chat window

to where I talked about the types of interventions (my fourth basic law...)

4) Credit repair involves INTERVENTIONS which invoke one of three

TRUTHFUL communication tactics: a) polite requests, b} requests for

information, and c) legal demands. Polite requests may be goodwill requests...

Or it may just be you begging Lowe's credit to remove that 30 day late from 3

years ago (which they may do). b} "requests for information" ... those types of

interventions include original creditor "validation" (so-called... we'll open that bag

of worms in Lesson 7 oops... Lesson 6 or debt validation (Lesson 7) where

basically you're asking the CRA (in the case of the HONEST AND ETHICAL

dispute I mentioned before) or the creditor for more information that they simply

don't want to take the time to provide necessariliy. They don't know where you're

coming from, and that's better. When you say, "This wasn't mine" and they

basically know different, the line is drawn in the sand. When you say, "Pursuant

to my rights under the Fair Credit Billing Act, please provide documentation

regarding every transaction ever associated with this account." Then their heads

spin (you hope,and they often do, lol) Much more powerful. Some creditors in

that situation-- especially if the stakes are low -- will simply delete the negs rather

than fool with it. That's the desired outcome for FDCPA validation... and for

FCBA escalated information requests... and for CRA disputes as well CRAs don't

provide account information like that but they are compelled to provide the

information that federal law spells out in the FDCPA in the FCRA. FCRA compels

credit bureaus. FCBA compels original creditors. FDCPA compels third party

collectors. That's a very over-simplified way to "map" it out in your mind. I used to

teach child psych at the University of Tennessee, and I was famous for repeating

myself... ha but I want to repeat one thing that was a cut and paste from

earlier...with respect to CRAs. In the case of credit bureau disputes, it's the

difference between saying, "The Sears tradeline (account 12345) is not mine"

versus "Provide documentation that the Sears tradeline (account 12345) belongs

on my credit report and that my rights have not been abrogated. Otherwise

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please delete this damaging data. "As you read the statute... and interact with

others on Creditboards... and become more familiar with the law and become

more comfortable with the material... You'll find yourself creating variations on

those kinds of interventions, and you'll likely share them with others! Then, a few

years later, you'll lead a class like this, LOL. (If you still find the material

interesting, ha.) In other words... that sample CRA dispute I just provided...

"Provide documentation that the Sears tradeline (account 12345) belongs on my

credit report and that my rights have not been abrogated. Otherwise please

delete this damaging data."would probably get OLD fast...think of your own

words but the point is the same ask them to prove it and don't you lie

To risk moving away from psychology and entering the realm of the preacher... I

just never understood those consumer advocates who believed that they needed

to advise others to tell lies. The CROA notwithstanding... lies just don't work as

well. You could send them separate... you could group a couple together, etc.

"Demonstrate that this material appears correctly on my reports. Request ample

documentation from these two alleged creditors." "If these items appear in error, I

have a cause for action because my rights may have been abrogated in that

case." See what you can do, ha?! Now, in real life... those words will have the

same impact as a "not mine" -- except more powerful because they don't know

where you're going next (EVEN THOUGH YOU DIDN'T THREATEN A LAWSUIT

EITHER) brevity is good Ok... So this brings us to the next item on tonight's

syllabus What are your credit repair goals? We did cover this a bit at the

beginning... It's helpful in credit repair...as with just about any worthwhile

endeavor in life...to know your goals before you embark. I think it was Missbee

who said she wanted a house you just have to know what you want fantastic.

Once you know...You'll be more focused. It's hard for me to get away from my

background in psychology... Finally, the last portion of tonight's syllabus... A note

about attitude. In this regard, a few suggestions have worked for me...

1) Be serious.

2) Learn about the various laws discussed on Creditboards... and I'll interject

from my prepared notes...those laws include... minimally...

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FCRA

FCBA

FDCPA

and even the Truth in Lending Act (which is a superset of the FCBA and a few

other civil rights)

HIPPA those are the ones you should get to know if you can if reading law

outright bores ya... (I love it but I'm weird) then there's a wonderful other way to

get it

READ THE BOARDS these people make it so interesting "search" is good

oops... getting back to my suggestions

3) Embrace your community. (In this case, embrace your friends on

Creditboards.com. They're your best allies.)

4) Retain all written correspondence, credit reports, and any other written

materials.

5) Make notes as if you're headed to court, even though you probably aren't.

Such documentation will likely become very helpful during your journey.

6) Don't scream, yell, threaten, or make an ass of yourself.

Those six things will keep you in good stead. (Ah yes, that, Blue) one bit of

controversy...I was browsing the internet last week and listened to some

recorded phone calls between a credit consultant and a few alleged creditors. I'm

not going to tell you whose calls these were, because I have much respect for

this particular person (even when some others sometimes don't). I've learned

much from this individual. Regardless, I disagreed with the consultant's attitude...

In every case, the phone call descended into a crescendo of conflict. The

consultant was SCREAMING AND YELLING..."IF YOU DON'T PROVIDE

VALIDATION, THEN I WON'T PAYYYYYYYYYYYYYYYY!" the consultant

wailed. "DON'T YOU UNDERSTAND, YOU IDIOT!!!!!???????????" And on and

on and ON AND ON AND ON. This ultimately gets you nothing that couldn't have

been achieved without risking an aneurysm. Similarly, threatening letters can be

shelved in favor of ones which -- through ethical but escalated requests for

information to which you are entitled -- simply irritate the other party into

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submission. I once wrote an essay on another discussion board which included

this suggestion: "Don't be a sonofabitch." I'd like to quote myself here...

"Some people think that embracing a litigious mindset requires acting like a

sonofabitch. (Can we say that on this board, lol?) Nothing is farther from the

truth. Whatever you do, DON'T act like a sonofabitch. Here's why."

"Sonofabitches aren't satisfied with the tradeline deletion. Sonofabitches

REQUIRE the tradeline deletion AND a monetary award of $10,000 AND a

formal apology AND admission of wrongdoing AND a brand new credit card AND

self-mutilation, etc. You don't want your adversary to believe that you are a

"crank" who could NEVER be satisfied." "Instead, you want your demands to

be VERY clear right from the start -- whatever those demands are. And you

should state those demands politely. Potential consequences should be stated

politely as well." "Picture the stance most often drawn by lawyers in a courtroom.

They are matter-of-fact to a deadly degree. They don't beg. They don't threaten.

They don't scream at adversaries unless they want to be admonished by the

judge. They simply state their case, as strongly and as seriously as possible.

END CREDIT 101

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LESSON TWO TRANSCRIPT

CREDIT 102: A Consumer Law Overview, 9/22/2005

PSYCHDOC'S CREDIT REPAIR SCHOOL FOR BEGINNERS

For those who have just joined us, I should mention that the 8 lessons are

divided into two sections...the first three lessons (where credit repair is framed as

an ETHICAL enterprise in opposition to the many UNETHICAL business

practices which comprise the consumer credit industry)...and the last five

sessions (where we discuss the nitty-gritty of credit repair -- interventions which

leverage your RIGHTS as a citizen). Like last session, I hope we'll all learn

something new, but I especially hope that those who are new to their credit repair

campaigns come away from these sessions with something that will contribute to

their eventual success.

Tonight's syllabus...

-1-- Course overview and format (which we've already done)

-2-- Brief review of the last session

-3-- "Three Musts" for beginners

-4-- The laws we reference

-5-- How to invent credit repair interventions

Basically... the first message... Credit repair involves INTERVENTIONS which

invoke one of three TRUTHFUL communication tactics: a) polite requests, b}

requests for information, and c) legal demands. dubzero... just a quick note for

those who weren't here before being polite doesn't necessarily mean being

solicitous or kissing someone's behind

essentially it means that a calm legal-based approach can be far more effective

than a bunch of screaming and yelling someone who calmly demands that the

other party comply with federal law is going to be far more of a threat than

someone who thinks they're going to get great results by trying to intimidate the

other side very true, dub and rich. Well, enough about last session... there is a

transcript for those newcomers here who would like to review that. That transcript

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can be found on the main credit repair board attached to a sticky message at the

top. Since this is primarily a course for beginners, and since it's likely that many

other beginners will read these transcripts later, I want to mention my "Three

Musts" for beginners.

1. You must be willing to learn. Actually, this is really about attitude. I once spent

an awful lot of time in another credit-related community preaching the virtues of

"BE WILLING TO BE A NEWBIE FOR AWHILE BEFORE PROCLAIMING YOUR

EXPERTISE." What I was trying to do with that is help people to understand that

they would indeed be accepted even if they didn't know anything at all. I had

seen plenty of newcomers, time and again, either not post because they thought

they didn't know enough to participate. Or they didn't post because they were

afraid that someone would think they're stupid. Or, worse, they would try to

present themselves as knowing more than they actually did know because they

thought that was the clear path to acceptance. (I think that irritates everybody the

most, lol.) The truth is far better than some newcomers might expect.

Creditboards.com is frequented by a whole bunch of folks who want nothing

more than to help somebody get through what they once got through.

For that reason, you simply must feel free to identify yourself as somebody who's

seeking help! And, for goodness sakes, feel free to do it without apology. Just get

in there and say, "Hey, I'm new here, this is my situation, and I want to learn and

would appreciate anybody's help." The Creditboards swimming pool is warm.

2. You must participate. You've not only got to be willing to learn, you've got to

participate. Some people introduce themselves, and then wait for the ambulance

to come to take them away to the Credit Repair Emergency Room where the

experts will do all their work for them. Then when it doesn't happen, we never

from them again. Creditboards isn't an emergency room. Rather, it's a

community, so after you introduce yourself and state your problem, you may not

get an instant answer. Rest assured, though, people are already getting to know

you, and they may well be thinking about what you've posted. After that, you've

got to "keep coming back" as I once heard elsewhere, continue interacting, and

always ask more questions. Staying with the community and participating fully is

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the key to your ultimate success. Over the long haul, you'll probably find you're

answering more questions than you're asking. But even when others think you're

an old grizzled expert, you should still feel free to ask even basic questions. Even

the old-timers are still learning.

3. You must read more than this. Homework is not fun. But you've got to do it if

you don't want to fail. Now, I'm not necessarily suggesting that you venture onto

the Internet right now and find the laws we'll mention tonight and read them fully.

(Of course that wouldn't be a bad idea, frankly, and many of the most successful

among us have done just that.). On the other hand, get ready to at least READ

ABOUT them. One way to do that is to spend at least an hour a day reading

Creditboards.com for one full week. Just get in there, and start reading. You'll

definitely come across stuff that makes no sense to you at all, but keep reading

anyway. If you do that for a significant amount of time, the material will begin to

congeal, and you will find yourself understanding more and more. Make a

commitment to yourself to read the daylights out of this board for a brief period of

time before you do anything else. Consider it your Master's Degree in Credit

Repair. Just as a bit of discussion Who here has actually read the FCRA? wow

lots of yeses, ok, who's read the FCBA (if you don't know what that is, I'll detail

that in a minute) FDCPA? FDCPA is one I would encourage you to read. well,

they're tough to read but if you can't make yourself read 'em as I said at least

read ABOUT them as much as you can on the board here are a few links

FCRA: http://www.ftc.gov/os/statutes/fcra.htm

FDCPA: http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm

FCBA: http://www.ftc.gov/os/statutes/fcb/fcb.pdf That's a pdf file (Adobe Acrobat)

I would encourage you to at least look over them look at the subsection titles and

dip in it will help as we move forward through the course. For those who are

interested in HIPAA (more later) regarding medical accounts Here's a great link

http://www.hipaacomply.com/

Very good stuff. Now, while we begin to talk about the legal basis for all of this it's

bears mentioning for a moment that there are other tactics. I'm keeping in mind

that there will be newcomers reading the transcript of this in the future so... You

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http://www.ftc.gov/os/statutes/fcra.htmhttp://www.ftc.gov/os/statutes/fcb/fcb.pdfhttp://www.hipaacomply.com/

may have come across credit repair methods which are strictly illegal. These

range from booklets and consultants who will advise you to do everything from

identifying someone near your age who died as a child and attempting to

establish credit in their name, to simply making up a Social Security number in

accordance with some geographically-based insider information regarding the

numbering scheme, to acquiring an IRS Taxpayer Information Number (TIN),

which looks like a Social Security Number, and establishing credit with that, to

you-name-it. Needless to say, all such methods risk loss of freedom, income, and

community standing. Anytime you see an advertisement for "NEW CREDIT FILE

OVERNIGHT," steer clear. Truly legal credit repair is a gradual process that

takes time to complete. In fact, what is advocated here is putting Federal statutes

to work in the service of improving your credit standing. Here, laws are chased

and embraced -- rather than shunned and avoided. Sometimes members of this

community use those laws to actually file lawsuits against abusive original

creditors ("OCs" for short), collection agencies ("CAs"), and credit bureaus

(officially "consumer reporting agencies" or "CRAs") to meet their goals.The laws

we most commonly reference are: The Fair Credit Reporting Act (FCRA), which

basically tells the bureaus what they can and can't do. The Fair Credit Billing Act

(FCBA), which is a subset of the more comprehensive Truth in Lending Act,

which essentially tells original creditors how they should behave. As an aside... I

really like this second one (FCBA) It's not one we commonly use in this

community... but it forms the basis of most so-called "OC validation" interventions

like the Nutcase Series and other good ones you'll see from time to time. More

shortly. The Fair Debt Collections Practices Act (FDCPA), which regulates debt

collectors. Health Insurance Portability and Accountability Act of 1996 (HIPAA),

which regulates health providers. Here's a very very brief way to think about

these...

The FCRA... Ensures access to credit reports. Regulates who has "permissable

purpose" to acquire a consumer's report Limits how long information can be

reported. Details how a CRA must handle disputes. And of course... the credit

repair intervention commonly associated with this statute is of course the credit

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bureau dispute. We'll delve into the FCRA in more detail in the fifth lesson

November 3 (CREDIT 105: FCRA Street Fighting)

FCBA: The FCBA requires creditors to bill correctly and completely, and it's the

FTC's job to make sure that the statute is universally applied. (But it can be your

job to ask that your creditors comply as well, LOL.) The FTC summarizes the

statute's prohibitions as follows: "unauthorized charges; charges that list the

wrong date or amount; charges for goods and services you didn't accept or

weren't delivered as agreed; math errors; failure to post payments and other

credits, such as returns; failure to send bills to your current address -- provided

the creditor receives your change of address, in writing, at least 20 days before

the billing period ends; and charges for which you ask for an explanation or

written proof of purchase along with a claimed error or request for clarification."

As you read the list of requirements the FCBA stipulates, just think about the

credit repair possibilities. Consider something like this: "In accordance with my

Federal civil rights as stipulated by the Fair Credit Billing Act, you are obligated to

comply with this lawful request for elaborated documentation for billing, including

charges and interest, as well as a full accounting of where each bill was mailed,

for the life of the account, or rescind these reports from every consumer reporting

agency to which you have reported same. Your expeditious handling of this

matter is expected." That's something that no original creditor wants to fool with.

This constitutes a truthful request for information.

Call this example FCBA Nutcase, or call it chopped liver, or -- even better --

invent your own creative approach using the statute. Keep in mind that the FCBA

is actually intended to assist consumers with CURRENT charges in dispute,

however creditors do not welcome the idea that they may have broken the law

with your account even several years before. And of course even though you

WON'T accuse them of that (because perhaps they broke no laws), they almost

always seem to get spooked when asked for such information. We'll cover the

FCBA more fully in the sixth lesson November 17 (CREDIT 106: FCBA Street

Fighting) FDCPA: What a goodie. Who here has ever sent a validation letter?

Great, ok, so I may be telling you what you already know... but a validation letter

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is an FDCPA intervention a quick mind-map of the FDCPA. Provides behavioral

standards for acceptible third-party collections behavior. Specifies that CAs must

always include several legal caveats in their dealings with debtors. (Before, CAs

would employ all kinds of shenanigans to mislead consumers regarding who they

were.) Allows the debtor to formally request (i.e., by letter -- hopefully certified

and sent with return-receipt requested) that the CA "cease and desist" from

communicating with the debtor further. Specifically details a consumer's right to

request further information regarding an alleged debt. Such procedures are

termed debt validation (as so many here know) and are so POWERFUL that we'll

devote an entire lesson to the matter on December 1 (CREDIT 107: FDCPA

Street Fighting). You'll sometimes see the credit repair mavens...the titans. LOL,

argue about what constitutes true validation or which legal cases require what

item, etc. Most of that is interesting if you're way into it... but the wonderful thing

is that validation requests often just work. For the same reason that FCRA

interventions (aka credit bureau disputes) and FCBA interventions (pestering

OCs) work. They simply don't want to fool with your lawful request for

information. CAs in particular would rather just move along to the next person

who'll roll over. They cost less and pay more. Again, we'll get more into the detail

of all of that in the FDCPA session. But I want to talk more here at the start about

the PHILOSOPHY of creating interventions. Here's why when you use somebody

else's intervention letter, that's fine but when 25,000 people use the same letter,

it may be flagged, if you begin to create your own interventions... or even if more

people begin to create unique ones... we'll all be better off collectively and it's

pretty darned easy! well, it cuts even deeper than just using your own words

(although I agree with that wholeheartedly). Pretend for a moment that there was

something called the FAIR CREDIT REPORT REQUIREMENT RAZZMATAZZ

ACT (FCRRRA). And let's further pretend that that law requires these things:

First, let's say that the FCRRRA says that CRAs must send thank you notes to

creditors every time they report new information to them. Second, let's say that

the FCRRRA stipulates that they must print their consumer credit reports with ink

bought only from Cartier New York. Finally, let's say that the FCRRRA requires

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credit bureaus to mail their reports to consumers only on Thursdays. Now,

remember that citizens (including you and me as well as corporate citizens) can't

pick and choose which parts of a statute deserve compliance. They must comply

with the whole act. And if they don't comply with every bit of it, then they've

broken the law. If corporate citizens like Equifax or Citibank or NCO violate a

statute, they've likely injured a real person, and there are serious penalties for

doing so. So, back to our silly fictional federal statute. A good credit repair

intervention wouldn't directly accuse the recipient of malfeasance (unless you are

sure that they ABSOLUTELY did commit the malfeasance). Rather, the credit

repair intervention would simply ask the other party to DOCUMENT THEIR

COMPLIANCE with the law. So, in this case, it would look something like...Dear

Equifax: Pursuant to the Fair Credit Report requirement Razzmatazz Act, please

demonstrate that you sent the required thank you notes to Citibank every time

they forwarded new information related to my account (number 12345).

Moreover, show that such information was printed with ink requisitioned from

Cartier New York. Finally, prove that you mailed the report in question to me on a

Thursday. If such documentation cannot be provided, please remove the item

from my report immediately. Sincerely, Joe Consumer

Essentially you're asking them to document their compliance. In other words, the

best way to create a unique credit repair intervention is to take a close look at the

federal statute in question (whether that's FCRA, FCBA, FDCPA, HIPAA, or

another state or federal law which you believe is relevant), and then ask the other

party to show that they aren't behaving criminally. When you approach the matter

this way, you aren't crafting lies. You're simply asking a company for information

related to your account, especially with respect to how that account has been

reported to the credit bureaus. Sometimes companies don't want to take the time

to address your lawful request in that manner, and some of those sometimes

simply delete the offending tradeline rather than fool with it (or you) anymore.

This approach is the essence of the credit bureau dispute (HEY BUREAU --

SHOW ME YOU'RE COMPLIANT WITH THE FCRA), the original creditor

interventions like the "Nutcase Series" (HEY ORIGINAL CREDITOR – PROVIDE

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ALL THIS INFORMATION ABOUT MY ACCOUNT PURSUANT TO FCBA), debt

validation (HEY COLLECTOR -- SHOW ME THE HISTORY AND

PROVENANCE OF THE DEBT PER THE FDCPA), and HIPAA interventions

(HEY DOC -- SHOW ME YOU HANDLED MY ACCOUNT IN WAYS THAT

PROTECT MY PRIVACY). Ok, I'll stay away from inventing anymore silly

statutes because we've got too many real ones to discuss as we move forward.

Still, I hope this example illustrates the similarities among the real credit repair

interventions we commonly use. This approach... requesting information

basically... is one that lawyers commonly use (what they sometimes term

"discovery"). Asking for information is your right as a consumer. Lawyers love

discovery simply because of the nuisance factor. And that same principle works

for you. Lawyers don't say to their opponent during discovery anything like...

"TELL ME WHY YOU BEAT YOUR WIFE (OR HUSBAND)." Instead they'll say...

"GIVE AN ACCOUNTING OF YOUR RELATIONSHIP FROM THE BEGINNING

UNTIL THE PRESENT." And then they look for discrepancies. If you really do

head toward court eventually with some matter, you'll probably collect a few

discrepancies vis-a-vis some CRA's behavior... or an OC... or a CA. Does any of

this resonate with anybody? (Hope so, lol.) This is basically the core method for

how these crazy credit repair interventions get started. You know, I was looking

over the transcript for the last lesson... and I received some accolades for a

couple of interventions I created... and I thought, "wow, what nice people" and

then I thought "wow, I have to UN-snow them" "I have to show them that there's

no magic to this" I mean, there's a choice point here for me...continue to indulge

the guru thing or just convince others that they are the gurus the second is best,

because I'm no guru (LKH will confirm that, LOL!) rich, how do you think I ended

up being a shrink? biggrin.gif Once you get the hang of this...essentially that it's

about demanding compliance and demanding information then you'll not only be

in a terrific position to radically increase your credit rating (i.e., your credit score...

the rates you're offered... etc.) but you'll be in a fantastic position to help others...

and if you're in this room and I see that even as we near the end of this lesson,

we have 37 people still here...then you're probably VERY interested in the topic

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and will likely be among those people who'll help the NEXT group of beginners,

this is a terrific community and those of us who care about helping others who've

been through what we've been through (like you) want to make sure that it

continues to grow... and that new credit repair interventions based upon law are

developed well, that's it for this time.

I hope something here was useful next time we'll delve into credit bureaus and

credit reports ... and credit scores and we'll talk about how to improve your score

EVEN WITHOUT these intervention letters then we'll get into the street fighting

Court records are tough... tougher than creditor tradelines. There's no harm in

asking the court to verify their procedures for reporting to credit bureaus You may

see some success. Most people simply dispute and re-dispute with the CRAs

until they're gone. You can ALWAYS ask your opponent -- in this case, the court

-- for information. Asking for information violates no laws. No, they're not required

to delete. Ask them to demonstrate that they abided by all laws. Very interesting.

Agreed or do it by letter, certified letter, ok... this strikes me as something that

you should also post on the board about being worried re fooling with courts...

YOU DON'T OWE ANY MORE MONEY, THE CASE WAS SETTLED biggrin.gif

You are now just a nuisance. You're not threatening anybody. You're simply

demanding some information. Don't be nervous, lol. THE JOY OF PESTERING

that's the key! Ok, see you in two weeks.

END CREDIT 102

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LESSON THREE TRANSCRIPT

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

Tonight's seminar, the third of eight, will focus upon credit bureaus and credit

scores. It's nice to see some new faces and some returning ones too. And, let me

do something we couldn't have done before the internet: I'd like to welcome

those who have discovered these transcripts in future weeks, months, and years.

I hope something here proves helpful as you approach your own credit repair.

This site, Creditboards.com, is made possible by its owners (you know who you

are, LOL), and I would like to express my appreciation once again for their

invitation. Ok, in case you don't know who you are... breeze, Pam, LKH, and

radi8... I've interacted with each of them through the years, all of whom have

poured a lot of care and sweat (and have endured heaping helpings of what we

call in Yiddish "mishegoss" in return)...QUICK ASIDE... "mishegoss" is your word

of the week. You are all now honorary Jewish people. Ahem. But they have put

up with a fair amount of mishegoss...just to benefit others. Their commitment to

consumer advocacy is astounding. I'll endeavor not to be a meshugana tonight.

Now I'll turn away from such comments with a much browner nose and focus

upon our task here.

Like last session, I hope we'll all learn something new, but I especially hope that

those who are new to their credit repair campaigns come away from these

sessions with something which may contribute to their eventual success.

Tonight's syllabus...

-1-- Course overview and format (which we've already done)

-2-- Brief review of the previous sessions

-3-- Approaches to debt

-4-- Two credit bureau myths

-5-- Credit scores

Tonight's session could easily have been the first one... except that I didn't want

to set the wrong tone for this. First, credit repair isn't primarily about the credit

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bureaus or about credit scores. Rather, it's about conducting ethical and lawful

interventions in order to further your personal consumer credit goals --whatever

they may be. Second, so many credit repair interventions (and their co-curricular

consumer protection statutes) aren't directed toward the credit bureaus at all.

Rather, they're directed toward original creditors, debt collectors, health

professionals, and others. ("Others" may include the Better Business Bureau, the

Federal Trade Commission, the consumer advocacy site PlanetFeedback.com,

etc. We'll begin to talk about these ancillary intervention opportunities in a few

weeks, as they can interlace nicely with FCRA, FCBA, and FDCPA based

interventions.) Still, it doesn't make much sense to conduct a credit repair course

for beginners without at least wearing out the usual yawn-inducing introduction

you see just about everywhere, which goes something like this: "There are three

major consumer reporting agencies, Equifax, Experian, and TransUnion, and

they maintain consumer records on hundreds of millions of Americans. It's their

legal responsibility to maintain accurate records, and it's your right as a

consumer to ensure that they follow through in that regard." Argh... I said it. I'd

like to back up a bit from that, though, and cut through to something more

essential, and that has to do with DEBT. Generally, the credit bureaus maintain

records (or, perhaps more accurately stated, LISTS OF UNPROVEN

ALLEGATIONS, lol) regarding how you as a consumer have behaved when

borrowing and repaying money. Even most court records that appear on such

reports often have to do with debt. Critically, your GOALS regarding debt will

dictate how you go about tackling what appears on those reports. Moreover,

HOW YOU BORROW and HOW YOU REPAY debt are perhaps the two greatest

influencers of credit scores. Manipulating ones borrowing and repayment

patterns is perhaps the quickest way to raising a credit score -- even, in some

cases, irrespective of what actually appears on the credit report. More about that

in a minute. For those reasons, it's important to step back a bit from the credit

repair task, especially at the beginning, and take stock of one’s own approach to

DEBT. That's really what this is about. Suffice to say, this isn't what some folks

want to hear. Nobody wants to be reminded to floss after brushing. For that

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reason, I won't spend too much time on this, but I would be completely remiss if I

didn't at least acknowledge the obvious: DEBT is what caused so many of our

problems which necessitate credit repair in the first place, so perhaps 5 or 10

minutes of this will be appreciated by someone out there at some point. As an

aside, I really like an article which appears on Creditboards (LINK) called "The

Problem with Debt Settlement Companies" written by radi8. He discusses a

widely advertised -- by a seemingly limitless number of companies -- method for

dealing with debt. It's a must read. There are many approaches to debt, but here

are two wide categories:

1) Wealth accumulation.

2) Eternal indebtedness.

Expanding these...

1) Is your long term goal to accumulate wealth? It almost goes without saying

that the wealthiest people (and the wealthiest corporations, for that matter) have

little debt and lots of money. If becoming more financially stable is your goal, then

reducing outstanding balances low should be an objective. Interestingly, this

approach has a credit repair benefit: your credit scores will rise. Most importantly,

you'll be less susceptible to fiscal disaster if you have an emergency fund of real

cash in case something unexpected happens.OR...

2) Do you regard a brand new credit card as INCOME? In other words, when the

shiny new MasterCard arrives with a $10,000 limit, are you already thinking

about that home theater system you can buy now? If so, then you may find

yourself overextended (and for most of us here, I should add the word "AGAIN" --

me included), unable to repay everything in a timely manner, and perhaps right

back where you started. Obviously, I would encourage anyone in the second

category to at least begin to think about how they've embraced and accumulated

debt. Ok, let's assume that accumulating wealth (the first category) -- and so, in

other words, reducing debt -- isyour financial goal. How will you do it? There are

three general approaches:

1) Reducing debt as quickly as possible.

2) Reducing debt the least expensive way.

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3) Reducing debt in a way that will maximize your credit scores.

While all three of these are worthy objectives, they are very different. And by the

way... If your goal is to reduce debt as quickly as possible, then you may not be

able to do it the least expensive way... Likewise, if you goal is either of the first

two, then you may not be able to do it in ways that will maximize your scores...So

this is about making choices...The first approach – reducing debt as quickly as

possible -- usually involves what Dave Ramsey and other authors have termed

the "debt snowball" approach. By the way, does anybody here ever listen to

Dave Ramsey? He's an anti-debt fanatic. That isn't my approach. But he

represents a viewpoint. His is an extremely compelling argument. Plus he's

entertaining. I recommend at least listening to what he has to say even if you

(like me) aren't an anti-debt nut. (With apologies to "nutty" here, ahem.)

Dave Ramsey's debt snowball approach involves repaying the smallest debt first,

then when that's taken care of, taking that payment and applying it to the next

largest one, and so on until everything's paid for. This approach affords

psychological advantages relatively quickly because it's encouraging to repay

something entirely and then move to the next one in turn. The disadvantages of

this first approach are...

a) Even if it's the most encouraging way to tackle debt (which is perhaps the

most critical factor for some people), it's not the least expensive way since

you're focusing on repaying the SMALLEST DEBT first -- and not the one

with the highest interest rate...and

b) It's not the most efficient way to raise your credit score, since it may well

be that the larger debts are ones which involve maxed-out revolving credit

lines (a score killer).

The second approach – reducing debt the least expensive way -- is the approach

favored by people like Suze Orman. Now Suze doesn't know much about credit

repair... LOL yep... ha... but she does offer an approach to debt reduction... Hers

involves prioritizing debt according to the actual cost of the money -- in other

words, the interest rate – and paying off the most "expensive" debt first. The

advantage of this approach is obviously the cost savings. This is different from

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the first obviously. The disadvantage is that you can easily feel like less progress

is being made especially if the most expensive debts are also your largest ones.

Also, like the first "debt snowball" approach, the focus isn't on your credit score.

two very different approaches The third approach – reducing debt in ways that

improve your credit score -- involves equalizing balances so that no debt's

"utilization ratio" (the amount owed divided by the overall line of credit) is high

and then paying down the various debts equally so that all the ratios lower

together. Again, this approach can result in DRAMATIC differences to a credit

score, but doesn't afford the psychological advantage of Dave Ramsey's "debt

snowball" nor the cost savings of Orman's approach. So it all depends upon your

goals once again. By the way... the use of the term "utilization ratio" brings us

squarely into the realm of credit bureaus and credit scores... Does anybody now

know what I mean by that? Just in case...Your utilization ratio is the amount you

owe on a debt divided by that debt's line of credit. For those who are new to all of

this information... Keep in mind this heuristic...LOWER UTILIZATION RATIOS =

HIGHER CREDIT SCORES That's true whether we're considering an individual

debt...and it's true when we're considering all debt...will give an example... but

You apply for revolving credit and keep a low balance. :) That's the irritating thing

about credit. You've got to struggle to improve your rating (your reports, your

score)... and then you'll qualify for more that will help further. interestingly, DTI

(debt to income ratio) doesn't really matter much unless you're buying a house

no problem I'll give an example... and then tackle cred's question

example...You've got a Chase MasterCard with a $10,000 line of credit And

you've only spent $1,000 of it. That card has a 10% utilization ratio. That an

example of a tradeline-specific utilization ratio. Now, overall...Let's say you have

three revolving lines of credit...And the overall credit available to you is, let's

say... $20,000... If you've spent, say, $5,000 of that then what's your overall

utilization ratio? (simple math) Credit scores take into consideration BOTH types

of utilization ratios. SO... Any consideration of improving your credit scores will

ALWAYS factor in HOW your borrow and repay your debt. Interestingly, some

people (me included) believe that this is the LARGEST factor in credit scoring

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(aside from having a bunch of negatives, LOL... but all things being equal...) Debt

is never a fun topic when raised in a milieu of people who love credit cards (like

me, ha) but it's a necessary topic... not only in terms of fiscal health...but also

with regard to your CREDIT SCORE which DOES interest everyone here I think.

OPEN accounts contribute to the score. CLOSED ACCOUNTS don't help... and

can hurt IF there's an outstanding balance. That's why the most common advice

you'll hear is... "Don't start closing accounts willy-nilly." Even the erudite Suze

Orman says so, LOL. And she's right. Ok, so long as we've established what

we're really talking about here -- i.e., DEBT -- let's turn to busting two common

credit bureau myths. First, let me ask a trick question...Which federal law

establishes the credit bureaus as official quasi-governmental entities?

MYTH 1: Credit bureaus are officially recognized entities. WRONG. Credit

bureaus are private companies (at least one is publicly traded, but it's still owned

by its shareholders) which are in the business of buying and selling financial

gossip about you. And what's gossip? Gossip is, at best, a list of unproven

allegations, and that's all a credit report is. By the way, that's WHY the Fair Credit

ReportingAct became law in the early 1970s... in order to regulate what they

CAN'T do. (More about that two sessions from now.) A credit report doesn't even

enjoy the official legal status of, say, your driving record maintained at your local

statehouse. It is unfortunate, then, that these unofficial credit reports sometimes

impact our lives far more than most any official document which exists.

Well, that's the way the lending industry has evolved. In the old days... like in our

grandparents' time... You'd go visit the banker. Who you probably went to church

with. And he (and in those days, it was always a he) he knew you. There were

credit bureaus. But that wasn't the primary consideration. Unfortunately, other

considerations that AREN'T helpful intruded. Like, for example, a banker's social

preconceptions... whether he thought women were creditworthy... or racial

prejudice, etc. So life wasn't rosy for everyone. Incidentally, that's the stated

rationale for credit scoring as well. On to myth two

MYTH 2: Items on your credit report are required to remain for 7 years (in most

states), except for bankruptcy related items which are required to remain for 10

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years. myth... WRONG. When you speak with the nice customer service person

at Sears, and they say something like, "Oh I'm sorry, Miss Jones, there's nothing

we can do because those things are supposed to stay on your report for seven

years," you should know that-- their niceness notwithstanding -- you're either

speaking to someone who is terribly misinformed (at best) or someone who is

deliberately lying to you (at worst). That may be a company's policy and the

credit bureau's policy, but it's not the law. The FCRA simply places LIMITS upon

what can be reported. It doesn't MANDATE reporting though! This is one of the

most insidious lies related to credit reports which we have embraced as a society

for whatever reason. There is no requirement, legal or otherwise, that private

companies must buy and sell information about you to others. Confronting what

appears on your credit reports, especially if done using ethical means, is simply

your way of saying: "Hey, I don't appreciate corporate titans who choose to

violate my privacy." Keep these two myths in mind as you go about the task of

confronting what appears on your credit reports, someone should bring a class

action lawsuit against any consumer reporting agency that says something like:

"Negative items must remain on your credit report for 7 years in your state." That

is an oft-told lie, and I can't wait for someone to challenge that kind of misleading

information. Of course, as long as we sheep believe, LOL...their business is

safeguarded. Which brings us to credit scoring... LOL,Here's what you see

everywhere...and it bears repeating for those who are new to the material...35%

of your score is influenced by account history (how timely you've paid), 30% to

current account usage (how much of your credit is being used, with greater

amounts being negative) which is the "utilization ratio" we discussed before, 15%

to length of credit history (the longer the better), 10% to new credit inquiries and

accounts (with fewer being better), and 10% to the "credit mix" or variety of credit

types present. Scores range from 350 to 850, with the mean value score being

right at 725. In real life, the most favorable credit rates are typically extended to

those with scores of 720 or above. That's what Fair Isaac Corporation (the FICO

company) wants us to know. They DON'T tell us something else, though. And

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perhaps someone in this room will one day sue their pants off, LOL... and it's

this...QUOTING MYSELF from another venue: "Your credit score isn't just

about you. If it was, providing it along with the rest of your credit report might not

violate federal law, which stipulates that your consumer file must only (and

obviously) be about you. Rather, it's about you and others. More specifically, Fair

Isaac makes use of what they call "Score Cards," which groups consumers

according to whatever criteria they choose. Then, they run what we statisticians

call Pearson correlations between credit report items and subsequent late-pays

for each consumer grouping. Through that continuous process, Fair Isaac stays

on top of the variables du jour which may diagnose bad future news. The final

step happens when your credit report is pulled and is analyzed through the use

of those comparative algorithms, and a credit score is then reported which

purports to predict the possibility that you are the type of person who may one

day become seriously delinquent." Now, I'm a statistics wonk... But what that

boils down to (for those who hate stats)...is that basically a credit score indicates

the PROBABILITY that a consumer will Credit scores are about helping lenders

PREDICT who will default. It's all about helping banks determine who is in the

group of people who may not repay them. The problem is...In any grouping like

that... There are the false positives... i.e., those people who will NEVER default.

And, interestingly, those people are in the majority... even among those who

have relatively low credit scores. So... we all pay for the mistakes of the few.To

quote myself one last time:"So does this sound kosher? Are prediction and

speculation and comparisons with other consumers fair items to include in a

credit report alongside the stuff that otherwise really is about a single consumer?

undoubtedly, the judiciary will eventually decide." This is why someone needs to

challenge the legitimacy of the credit reporting and scoring industry generally. I

don't believe that they are honorable enterprises. Ok... to cled's question, Try not

to confuse the credit score number with what I was talking about when I

mentioned "utilization ratio" The actual FICO score is just an INDEX OF

PROBABLE DEFAULT That's not to say you didn't ask a great question... People

often ask things like..."If I apply for credit, how many points will an inquiry take

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off." Now, even though the answer to that is usually "2 or 3 or 4" LOL... (I

shouldn't fall victim to answering, LOL)... The real answer is this... People who

apply for LOTS of credit are among that statistical grouping of people who are

MORE likely to default...So the more inquiries you have, the more you resemble

that group of probable defaulters. Similarly... people who have defaulted in the

past are statistically MORE LIKELY to default again than people who never have,

so... the presence of R9's are poison. (R9 is Equifax's designation for a charged-

off or collection revolving account.) Well... people who have 60 day lates

STATISTICALLY RESEMBLE probable defaulters MORE than say those people

who have only 30 day lates (or no lates) Again, it's about comparing you to

others. And I (and some lawyers I've spoken with) believe that when a credit

bureau includes a credit score, they may be breaking the law. Consumer credit

reports cannot include information about other consumers, and the credit score

essentially does that. But that's for tomorrow's litigation, LOL. Some people say

that an ideal utilization ratio is 10%. Others say 5%. Still others say, "keep it

below 30%." I think everyone agrees that anything above 50% is hellish on a

credit score. (Not to mention that it's hellish on your fiscal health. But there I go

talking about flossing again.) ;) The truth is this...People with LOW utilization

scream "responsibility" to them. Ok... Now... A few words about raising your

credit score. What follows is conventional wisdom you'll see elsewhere, but I

agree with it wholly.

1) Eliminate negatives, but do so using ethical means.

2) Pay down revolving credit.

3) Stop taking advantage of installment loans (other than a mortgage and car

payment)

4) Don't close accounts. And, yes, I mean open revolving lines.

That's advice for beginners. When you become more comfortable with your

GOOD credit (after your credit repair succeeds)... then you'll tweak things...You'll

apply for a super premium MBNA card and close your Capital One card, etc. But

a good rule of thumb here at the beginning is... Don't start closing accounts here,

there, and everywhere. And when it doubt, post to the boards here and get

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advice. Well, that's it for tonight! In two weeks, we'll discuss some overall

strategies for taking a credit report, triaging it, and devising your best game plan.

Then we'll delve more deeply into the down-and-dirty credit repair tactics we love

the most. I hope something here was useful for somebody tonight! :) LOL!

student loans are ok when you need them... but interestingly, those student loans

will depress a score. Doesn't that suck? How do I know? I've seen it myself. Now,

interestingly...Now don't just go and dispute something like that off just because...

they may be your only positive items! In which case...they'll add more than they

take away. Credit scoring is a dance. I would never advise people to lie. But...

There's no harm in using the approach we discussed in the first two sessions...

which is..."Please demonstrate that this inquiry was included on my report as a

result of the company's permissible purpose... in accordance with my federal

rights." You can still ask the bureau to demonstrate that. It will be much tougher

to remove, for sure. Inquiries that DON'T have an attached active tradeline are

termed "orphaned inquiries" by some attorneys I associate with, and those are

much easier to remove...Still, inquiries are tough period as you know. One risks

having the report (and the account) flagged. That's true of almost all credit repair

interventions though. Flagged = noted as being an identity theft victim... makes it

tougher to get new credit,once again it's about your goals (reference the section

of tonight's session regarding the three types of debt repayment) If your goal is to

improve your scores... then definitely pay down your revolving credit. If it's about

other things (ref. earlier paragraphs) then pay the student loans.

END CREDIT 103

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LESSON FOUR TRANSCRIPT

Tonight's syllabus...

-1-- Course overview and format (which we've already done)

-2-- Brief review of the previous sessions

-3-- The purpose of "triage"

-4-- Credit repair rules of thumb

-5-- YOU are your guru

Each session builds upon the previous ones. Now on to "credit report triage"... As

an aside, you gotta love the internet. For those who enjoy sound effects, here's

Merriam-Webster's Stepford Person pronouncing the word for all of us...

Link: http://tinyurl.com/dze2z

I know, I know... that was so pedantic of me I can't help it. Anyway, as you know,

the term "triage" is borrowed from war battlefields where medical personnel deal

with groups of injured soldiers. Generally speaking, the wounded are divided into

three groups (hence "triage") --

1) the most seriously injured who require immediate attention in order to prevent

death,

2) those with serious injuries who aren't life-endangered,

3) the walking wounded who will still require first aid but who can assist the

EMTs with the other two groups but we'll pretend nothing's "dead"on a credit

report, lol Actually I borrowed my definition this afternoon from Wikipedia so

there I feel like a giant cane is about to enter stage left and pull me away now :)

Simply having a plan for what must otherwise be terrifying circumstances helps

first responders cope. Similarly, knowing that there is an organized way to

proceed (with any endeavor) helps one get past the fear of starting any sizable

task. Was anybody here (who's already begun their credit repair program) ever

intimidated by the task when they first got started? Well I felt the same way at

one point. Sometimes credit report issues are so plentiful that it's easy to feel

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http://tinyurl.com/dze2z

like one is about to fight a war (of sorts). My goals in adopting the metaphor are

threefold:

1) Impress upon you my belief (shared by many in this community) that

practically no bad credit rating is beyond repair.

2) Empower you to approach each of your three credit reports with optimism and

a sense of fun as you delineate your plan of attack.

3) Provide some concrete rules of thumb for matching tradelines with

appropriate credit repair interventions.

So... whether it's gossipy bureaus... or petty creditors... or ruthless and unethical

debt collectors... there's a systematic approach for each. For those who haven't

begun, here's "PsychDoc's Plan of Attack" (licensed to you only for your own

individual personal use under the "GNU General Public License" but not for use

in any commercial setting). :) Let me emphasize before I delve

in, though, that this is simply my approach. I don't want to represent this

as the "correct" way, or the "right" way, or the "only sensible" way, or

anything of that sort. That said, I'll proceed...

PRELIMINARY STEP: Go to Kinko's

(or your office copy machine, or wherever) and make COPIES of your latest

credit reports. Keep a set of "clean" originals in a file somewhere, though,

just in case you ever need them as evidence in a court proceeding. I

realize that eventuality is unlikely, but that's still a good idea.

As for the COPIES, you're about to take a nasty red marker and mark them up

as if they're a graffiti wall somewhere. Spare no mercy. Those reports are the

work of the devil. (And if not the devil, then at least the work product of corporate

drones who probably care less about your personal welfare.)

STEP ONE: Keeping our second session in mind (CREDIT 102: A Consumer

Law Overview), you're going to assess each item on your report and assign it an

appropriate credit repair intervention. First, comb through your reports and look

for those tradelines (credit industry jargon meaning "an item on your report")

where you were never more than 30 days late. And, by the way, don't cheat...

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we're NOT going to include anything with 60 day lates or work during this

pass... Now, you're going to write the word "GOODWILL" next to each of those

tradelines. By the way, if you're completely new to all of this, then don't worry

what that means right now. Just do it. You're triaging. :)

STEP TWO: Now, you're going to make a second pass through your reports.

This time you're hunting for any tradeline whose worst notations are 60 days late.

For these you'll mark "GOODWILL OR FCBA." More in a few minutes about that.

STEP THREE: Now, on the next pass, you're going to label those items whose

worst notations are 90 to 150 days late and which NEVER entered collection or

charge-off status. Mark those as "FCBA OR NUTCASE." More about what that is

in a few minutes also. Ok, ok, ok, technically we're going past "triage" now...

Perhaps we'll have to coin a new word..."quattrage" or even "pentage" or

"sextage" (because, YES, there's going to be fourth, fifth, and sixth steps, ahem).

Those of us who appreciate 12 Step Programs are welcome to say the Serenity

Prayer now. (Actually, that may help with this task, but, alas, I digress.) And, NO,

"sextage" doesn't guarantee any additional fun when you're through. (Although,

actually, that may help too, but now I'm way off topic. Cough, cough.)

STEP FOUR: Next look for items that have entered collection or charge-off

status. By the way, Equifax includes their handy "R9" or "I9" designations, which

will help make short work of this task with that bureau's reports. If the tradeline

was placed there by a third-party debt collector (in other words by "XYZ

Collection Company" as opposed to "MBNA"), then mark those tradelines with

the phrase "VALIDATION." If the chargeoff was put there by an original creditor,

mark it "OC VALIDATION." Don't worry about the wizened souls who proclaim

that there's no such thing as "OC VALIDATION" at this point. They're right, but

those of us who advocate differently are right too. Kindly sit with the tension for a

moment, and I'll get back to it in a few minutes. (Suffice to say, groups of us have

been debating this for years. Meanwhile, consumers are netting credit report

deletions, irrespective of the technicalities.)

STEP FIVE: Up to now, no tradeline has received more than one mark. That may

change with this step. Mark it VALIDATION if a CA and OC VALIDATION if an

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OC to Step 5... This step requires you to work through your reports and locate

any MEDICAL tradelines. If the item was placed there by a doctor, a hospital, a

testing lab, or someone collecting money for any of those, mark this one with the

acronym "HIPAA." Note again that you may be writing "HIPAA" next to something

which was already labeled "GOODWILL," "GOODWILL OR FCBA," "FCBA OR

NUTCASE" or "VALIDATION." a tradeline may have more than one notation

STEP SIX: Anything left is probably there as the result of some legal action -- a

lien, a bankruptcy notation, a judgment, etc. Go back and mark those

COURTHOUSE."

Now you have the rough outlines of a plan... with plenty of flexibility. Each of

those notations reflects a particular credit repair procedure. Your "GOODWILL"

tradelines are due a Goodwill Letter. This is where you need to do your

homework – search the board for the basic template. The "Goodwill Letter" saw

its origins in a letter penned by "marci" (an occasional participant on these

boards) which she called her "Sample Nice Letter for Paid Chargeoffs." I

borrowed marci's letter (lifting a couple of her brilliant key phrases), reworked it

for those tradelines with minor late pays which had never charged-off, and

dubbed it the "Goodwill Letter" after a rep for Sears National Bank told me by

phone that they had an internal phrase for certain nice people who begged

forgiveness --the "Goodwill Adjustment." That sounds like something a

chiropractor would do... :) Regardless, the approach is tried-and-true, and while

nothing works all the time, this one does work some of the time. Has anybody

ever had success with the Goodwill letter? I realize most in here are new...

some no's... some yes's Let me diverge from the prepared remarks for a

minute... I have a philosophy about credit repair interventions... The philosophy is

this... Let's say that a credit bureau dispute will work 5 or 10 percent of the time

or even 20 percent... and let's say that a Goodwill approach will work 5 or 10

percent of the time and let's say that a Nutcase approach will work 5 or 10

percent of the time FCBA same FDCPA validation same, etc. and then you try

again...somewhere down the line you're going to clean it up... persistence and a

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variety of approaches is key I just hate it when I see somebody really punishing

themselves after they try an intervention and it doesn't work. They despair...

OH NO... IT DIDN'T WORK I'M DOOMED It's just horrible because you know

how they feel... which is terrible but if they kept in mind that each intervention has

a chance of working and that interventions can be REPEATED and in some

cases... some tradelines can call for multiple interventions per the triage

approach I just outlined above Your chances of succeeding during the next year

or so... are HUGE. Be encouraged. I should put that in all caps: BE

ENCOURAGED. :)

Ok, for those tradelines marked "GOODWILL OR FCBA" you have a choice. You

might try one or the other. Or you might try one and THEN the other. Refer to the

second session for commentary regarding the FCBA approach, and customize

your own. You approach it as quickly as possible. Those tradelines marked

"FCBA or NUTCASE" also present a choice. Try one, or the other, or do both

(space them apart awhile). The "Nutcase Series" enjoys a good number of

testimonials, and a template and accompanying rationale can be found on the

board Again, nothing works all the time, but taking NO action ensures failure, so

buck up and move forward! The following sentences should not substitute for

your doing just a few minutes of homework and reading the rationale here on the

boards, but here it is anyway in a nutshell Essentially, the Nutcase approach

can be summed up as a polite but escalated set of information requests. Your

questions likely compel the other side to wonder what you plan to do next... Will

you sue? Are you a "litigious nutcase"? Sometimes, creditors would rather just go

ahead and delete a severe late mark than risk (or waste their time) tangling with

you any further. As an aside, has anybody seen success by trying the Nutcase

series yet? Let me say something about "required"... You'll sometimes see one of

us old fools say something like... "Address it in a red pen." "Then fold it twice."

"Three times along the seam." "Then address the envelope in purple ink."

And on and on and on. Sometimes there is a reason for that... Maybe the old-

timer wants you to NOT look like a credit repair organization... Well... lemme tell

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ya what I know about CROs... they break out the purple pens sometimes so I'm

really at the point where I hesitate to get so specific.

Next, those tradelines marked "VALIDATION" should receive a formal request for

validation pursuant to the FDCPA. (Again reference the transcript for seminar

#2.) You'll find a template for the letter, as well as its sequential successor

termed by some the "Estoppel" letter, here on Creditboards. Plus, you'll find no

end of discussion and debate regarding such interventions. Again, I would advise

that you spend some time (a few hours) reading about validation before you fire

these off. Also remember that the larger the amount of an alleged outstanding

debt, the greater the risk that you'll "awaken the giant" (search the board for that

phrase). If in doubt, seek legal counsel, or at least ask for the advice of fellow

travelers on the board. Quick point of discussion... Has anybody succeeded with

Validation? Now, there are in credit repair, as with most areas of interest, topics

which are controversial where perfectly smart and right people see things

differently. In credit repair, one such area involves the notion of "OC

VALIDATION" (i.e., "original creditor validation"). The FDCPA only (well, almost

only, but we'll not get into more advanced and arcane debates in this beginner

session) regulates third-party debt collectors. So, technically, heapings of respect

should be accorded those who maintain that there is no such thing as "original

creditor validation." Incidentally, in this regard, you'll find people on the boards

debating who "verifies" versus who "validates" and similar arcana... So

technically, it's true... original creditors verify and don't validate That said, I've

seen plenty of people net credit report deletions by sending the STOCK

validation letter to original creditors, irrespective of whether or not the OC was

actually required to do anything at all, and arguments about words

notwithstanding. I personally have never enjoyed the verify/validate wars, but I

have enjoyed watching consumers win their credit repair battles. One possible

semantic solution I've recommended... Take a validation letter, substitute the

word "verify" for "validate" and substitute references to the "FDCPA" with

references to the "FCBA" and fire them off. Whichever position appeals to you,

you should know that sending a stock validation letter to an original creditor does

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not abridge your rights as a consumer in any way. So, for example, if you send

the "wrong" letter, perhaps the OC will write you back and say, "The FDCPA

does not pertain to us. Thank you. Now go pay the people to whom we sold the

debt." What they can't do is slap the cuffs on you for daring to ask for information

about the alleged debt. The debates almost get political, and I'll dare not make a

claim regarding "what's best" because many well-informed people I respect

disagree with each other. My goal tonight: at least beginners who read this will

perhaps now better understand what the argument is about generally when they

come across it here or elsewhere.

QUICK CROA DISCLAIMER: I am not an attorney, and this is not legal advice.

Second, never misrepresent your situation when sending letters to anyone for

any purpose.

Now... on to HIPAA This requires more homework. (Sorry, but there's no way

around it.) Search the board for the term "HIPAA". I especially appreciate all of

WhyChat's comments and advise regarding how to use this statute. In a

nutshell, no medical provider wants to entertain the possibility that their

credit bureau report has violated your federal privacy rights. That simple but

lovely concept defines the approach. :) The irony is that you could try that same

intervention in 4 or 5 months, and it might work. Of course, by that time, a bureau

dispute may have done the job. It's all about persistence. Clouds, speaking as a

shrink, I can confirm your hypothesis. LOL! Now, I don't want to suggest that

every medical tradeline is necessarily appropriate for a HIPAA-based credit

repair intervention, so, again, do some research on the board before proceeding

in this regard. A number of approaches have been detailed regarding courthouse

notations... A detailed discussion of these would absolutely extend well beyond

the parameters of a beginner's seminar, but the boards contain many relevant

discussions worth exploring. At least you've marked your credit reports for those

tradelines which may be appropriate for one of these approaches. Finally, every

single item on a credit report merits FCRA verification by requesting same from a

credit bureau. That means that essentially every item on your reports will be

matched with at least two interventions... one sent to the bureaus... and one sent

34

to whoever placed the item on the reports. In the next three sessions, we'll

detail FCRA (bureau-directed), FCBA (OC-directed), and FDCPA (CA-directed)

approaches in more detail. Such discussions will also include at certain

points what some term "the one-two punch"... an approach which leverages

both bureau-directed and creditor-directed interventions in tandem in order

to effect a particular result. Stay tuned.

Finally, let me move to the last section of tonight's syllabus which is really just a

simple reminder... You really are your own guru. Or at least I hope you eventually

will be. The more educated you become to credit repair, the more you'll find

yourself entering into the many excellent debates regarding law, approaches,

philosophy, and even attitude. Perhaps there is a right answer, or perhaps every

wizened old-timer has a piece of the truth. Ultimately, the more you know, the

better you'll be able to decide how YOU feel about any number of controversial

issues. And with that, I hope somebody new here feels MORE EMPOWERED to

dig into their reports in a SYSTEMATIC WAY... and then do some co-curricular

RESEARCH on the boards to learn more about the various interventions you've

designated. Now, on that note, it's time to end... I'll look forward to seeing you in

two weeks when we talk more about FCRA interventions you can employ with

the bureaus. We'll also excerpt actual letters in the next few sessions, but don't

wait for that... Delve into the boards now and wear out that SEARCH button! :)

tell me... well, she can still ask the OC to document that they have crossed every

t and dotted every i you can pester a paid OC like crazy without lying until they

are just sick of you One thing I like to say to folks... NO LAW LIMITS YOUR

NUISANCE (Unless you get violent or threatening... lol) So have at them.

Eventually they'll wonder if it's worth it to report that 60 day late tradeline.

Breeze hit it on the nose. well... See you in two weeks. :) I hope this helps

somebody at some point! Thank you too. :) on to life get those markers!

END CREDIT 104

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LESSON FIVE TRANSCRIPT

CREDIT 105: FCRA Street Fighting, 11/3/2005

Tonight we examine what is obviously a very important component of anybody's

credit repair campaign -- the credit bureau dispute. I didn't want to give the wrong

impression that credit repair was mostly about credit bureau disputes... Lots of

people believe that, but I don't. I'll mention why in a minute for those who are

mystified by that, LOL! For the first four sessions, I mentioned the Creditboards

site owners for all they do to keep this site up and running, but I'm going to do

something different for the second four sessions. Tonight I'm going to thank the

owners of other sites for all they do. Actually, for the next four sessions I'd like to

recognize those hard-working (and heretofore thankless) Creditboards Forum

Leads and Mods... Can we have a rousing round of applause for (in alphabetical

order) cotterpin, CramItCCCAs, fla-tan, HDAlex, MarvBear, rigirl, TeeSharice,

and TxQuiltGirl? (Did I leave anybody out??? ...or include somebody who'd

rather not be included anymore?... If yes, I'll correct that on the transcript, LOL!)

Tonight's syllabus...

-1-- Course overview and format (which we've already done)

-2-- Brief review of the previous sessions

-3-- FCRA overview

-4-- About disputing

-5-- Types of disputes

-6-- About inquiries

-7-- Expectations

Well, on that note we'll dive into tonight's material. In the second session we

began to describe the various components that comprise the FCRA. Now, there

are entire multi-day seminars devoted to the topic. Lawyers pursuing CEUs

attend those... We obviously can only skim the surface... But what I'd like to do is

highlight those things that may be of particular interest (AND HELP) to you. CEU

= continuing education unit... In most states, lawyers and other professionals

have to engage in a certain number of hours of continuing education in order to

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retain their licenses to practice. The Fair Credit Reporting Act of 1971 ...

accorded all of us some basic rights regarding what credit bureaus said about us.

Before that time, credit bureaus engaged in some very questionable activities.

For example... The company that became Equifax began life as the "Retail Credit

Company" in Atlanta, Georgia. That was the old Atlanta credit bureau. Retail

Credit grew and became the primary bureau in the southeast, and they had a

snugly relationship with Welcome Wagon. Does anybody remember the

Welcome Wagon ladies (and they were almost always women)? Well... Some do,

some don't... you'd move into a neighborhood and a couple of very friendly

women would come to the door with a little basket of goodies... coupons, info,

etc. and welcome you to the fair city. They would then make careful notes about

the family. Did it seem upstanding? Did anybody smell of alcohol?

What color was the family? (I kid you not.) This kind of data was then transmitted

back to headquarters... And the good old Retail Credit Company would include

stuff like that on your credit report. Oh... another one...Was there a man in the

house? (Families not headed by a male were considered by some bankers to be

less creditworthy and more risky.) Some of the abuses were essentially erased

by the civil rights legislation of the 1960s. The Civil Rights Act in particular erased

some of that, but some of the abuses continued. By the late 1960s there was an

uproar, and Congress finally passed the FCRA in order to help all of us. For the

first time, consumers are able to actually take a look at their credit reports!

Believe it or not, before that time, ordinary folks couldn't even take a look. There

were no restrictions upon WHO could actually pay the credit bureau to see your

information. And so on... In 1971 the FCRA took effect. And the Retail Credit

Company changed its name, Equifax. It was a nice break from the abusive past.

The smaller bureaus like that... For example, CBK in Knoxville, TN was bought

by Equifax In other parts of the country, other large bureaus consolidated...The

old Chicago bureau... The Credit Bureau of Cook County... became TransUnion

and gobbled up every other bureau in sight. Similarly two other large regional

bureaus combined to create Experian. Nobody crowned these companies with an

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official tag. TRW was one of the two companies that became Experian. Ok,

enough history...

The FCRA...

1) Ensures access to credit reports.

2) Regulates who has "permissable purpose" to acquire a consumer's report.

(in other words, gives YOU certain rights about who puts inquiries on your

reports)

3) Limits how long information can be reported. (generally 7 years for regular

tradelines and 10 years for bankruptcy-related ones)

4) Details how a CRA must handle disputes (more about that in a second)

And the recent amendment to the FCRA... FACTA...even gives us all the right to

free reports from each bureau once a year. Typically... You'll see old-timers give

some initial advice to consumers BEFORE they start disputing with credit

bureaus.

1) Opt-out. (In other words, let the bureaus know you aren't open to promotional

advertisements and offers.) and

2) Dispute multiple names and addresses that may appear on your report.

So you pick one and dispute the others... If your name is Robert Sheldon Poole...

you may have R.S. Poole on the reports as well as Bob Poole and a half dozen

others. Now... does anybody know what the rationale is for OPTING-OUT (other

than offers can be a nuisance)? Well, those may be reasons... But some people

believe this... Since the bureaus are engaged in the business of buying and

selling information about us... those of us whose reports are in OPT-OUT status

are less valuable... and therefore what appears on our reports just doesn't matter

as much... so... (and I'm not sure I subscribe to this, but I'm not sure I don't

either) Disputes from those of us who've opted-out may be easier to accept...

than from those whose reports are juicier. Again, I don't know if that's just a

bunch of crap or not. BUT Some folks I respect here believe that mightily and

seem to have anecdotal evidence in support of that belief. I know some people

here must have wondered, "Why in the hades are they suggesting I opt-out all

the time, lol?" "I like junk mail, after all." Etc. LOL! Well, that's the reason. LOL,

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good enough, Now... About the second reason... Anybody know the credit repair

rationale for disputing multiple names and addresses? Actually yes. Again, some

folks believe that the automated systems in place verify one data point or

another. The fewer bits on the report, PERHAPS the hard to verify. So... Very

smart people on both sides of the discussion sometimes debate this. I'm not

going to take a side...(Not because I'm afraid to take sides, LOL!) Rather, I'm just

not sure. It seems reasonable. But we don't know for sure. Some folks swear by

the advice, and frankly, extra names and addresses are probably the easiest

thing to