Preface

Why a second edition? There are many reasons, including the December 2003 passage of the Fair and Accurate Credit Transactions Act (FACTA), which amends the Fair Credit Reporting Act (FCRA). In addition, identity theft continues to rise, and there are some new strategies for dealing with it; the Bankruptcy Abuse Prevention and Consumer Protection Act (commonly referred to as the Bankruptcy Reform Bill of 2005) was passed into law on April 14, 2005 (taking effect on October 17, 2005), making bankruptcy far less appealing; and my knowledge of credit restoration tactics and strategies has grown significantly in the two years since the first edition of BestCredit was published.

All these things are good for the consumer and collectively improve the chances for do-it-yourself credit restoration. And yet one of the most dramatic changes has to do with a decision by Fair Isaac and Company (FICO) to release detailed information about its credit scoring model. This is no small thing, since 75 percent of mortgage lenders use the FICO credit score to assess risk, more than 90 percent of credit card issuers use it in their lending decisions, and 70 percent of all lenders use it for all lending decisions.¹

In this edition, I’ve also included new information that was requested by readers of the first book. This includes a greater explanation of legal remedies, what to do when swimming in debt, what really happens when a credit bureau receives a dispute letter, and how to go about removing public records. I have also broken down things in a way that’s more easily understood, and I’ve developed what I call situational and collective assessments. These are really nothing more than a series of relevant questions, ones that will take the important issues and connect them with real-world circumstances, enabling you to grasp your own situation and more readily create an individualized road map to clean credit.

Taking steps to improve your credit rating and reduce debt is truly commendable. It isn’t easy, and your initiative and commitment to improving your credit situation will ultimately enhance not only your credit but your life. It’s this commitment, mixed with perseverance and the tools I’ll provide, that is key to attaining your goals.

And yet it’s easy to feel bad when your credit is poor; guilt, shame, and even depression often accompany a bad report. Furthermore, every time you get denied, it’s a sobering reminder of an old mistake—a festering wound. But don’t be disheartened, because you’ll begin to feel better just as soon as you act to do something about it. Believe me, empowerment is very therapeutic.

Doing something begins with learning and having an open mind. Many people are misinformed about their rights concerning debt collections, credit reporting, and debt reduction. As a former bill collector, I learned firsthand the cold, hard facts about debtors and creditors. Having been on both ends of the spectrum, I have gained a keen understanding of the many facets of credit reporting and the powerful tools that are available to get you out of trouble. My goal is to arm you with this knowledge in order to turn things around and get you going on the right track. Each method I present is tried and true; there isn’t anything here that I haven’t tried personally.

So why do I do it? It’s my belief that credit reporting is inherently flawed. Why? Because there are extenuating, life-altering circumstances that often lead to financial changes and thus financial risk. These occurrences are often outside the control of individuals. Yes, the credit reporting system is there for lending institutions to assess risk in determining whether to extend credit, but the risk assessment and the credit extended are based on a set of circumstances that can ultimately change. Yes, an individual’s “creditworthiness” may have changed, but only as a function of how much credit to extend, not whether or not he or she is actually a good credit risk.

1. Brian Deagon, “Fair Isaac’s New Scoring Service Attracts Banks,” Investor’s Business Daily, July 25, 2001; Betty-­Lin Fisher (quoting Fair Isaac spokesperson), “It Pays to Know the Score: Credit Bureaus Reveal Where You Rank,” Detroit Free Press, April 22, 2002.