Bucci - Credit Repair Kit For Dummies

Credit Repair Kit For Dummies, 4th Edition

Published by: John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030-5774, www.wiley.com

Copyright 2014 by John Wiley & Sons, Inc., Hoboken, New Jersey

Media and software compilation copyright 2014 by John Wiley & Sons, Inc. All rights reserved.

Published simultaneously in Canada

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the Publisher. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www.wiley.com/go/permissions.

Trademarks: Wiley, For Dummies, the Dummies Man logo, Dummies.com , Making Everything Easier, and related trade dress are trademarks or registered trademarks of John Wiley & Sons, Inc., and may not be used without written permission. All other trademarks are the property of their respective owners. John Wiley & Sons, Inc., is not associated with any product or vendor mentioned in this book.

LIMIT OF LIABILITY/DISCLAIMER OF WARRANTY : WHILE THE PUBLISHER AND AUTHOR HAVE USED THEIR BEST EFFORTS IN PREPARING THIS BOOK, THEY MAKE NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE ACCURACY OR COMPLETENESS OF THE CONTENTS OF THIS BOOK AND SPECIFICALLY DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. NO WARRANTY MAY BE CREATED OR EXTENDED BY SALES REPRESENTATIVES OR WRITTEN SALES MATERIALS. THE ADVISE AND STRATEGIES CONTAINED HEREIN MAY NOT BE SUITABLE FOR YOUR SITUATION. YOU SHOULD CONSULT WITH A PROFESSIONAL WHERE APPROPRIATE. NEITHER THE PUBLISHER NOR THE AUTHOR SHALL BE LIABLE FOR DAMAGES ARISING HEREFROM.

For general information on our other products and services, please contact our Customer Care Department within the U.S. at 877-762-2974, outside the U.S. at 317-572-3993, or fax 317-572-4002. For technical support, please visit www.wiley.com/techsupport .

Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com . For more information about Wiley products, visit www.wiley.com .

Library of Congress Control Number: 2013954101

ISBN 978-1-118-82151-0 (pbk); ISBN 978-1-118-82150-3 (ebk); ISBN 978-1-118-82157-2 (ebk)

Manufactured in the United States of America

10 9 8 7 6 5 4 3 2 1

Chapter 1

In This Chapter

Handling credit problems

Rebuilding your credit after a crisis such as a foreclosure or bankruptcy

Safeguarding your credit and your identity

Discovering how to manage your credit

Keeping your credit solid in every stage of life

C redit plays a larger role in life than ever, and it looks like its influence will only expand in the years to come. The good life, happiness, and credit are inextricably linked. Its not that more material things make you happier, but bad credit exacts a price from your life and your relationships with others. Think of it as your credit/life connection. You must successfully manage your credit and, by extension, your personal finances if you are to lead a successful and satisfying life in these United States.

Financial products, credit foremost among them, have become much more complex and powerful, while the price for having a bad credit report has never been steeper. Your credit report is a financial snapshot of your life. When you use credit, the information usually gets reported to a data storehouse known as a credit bureau. This information ends up on your credit report for at least the next seven years. The good, the bad, and the ugly are all there for anyone you do business with to see and for FICO and VantageScore to summarize in a three-digit number known as your credit score.

Bad credit can keep you from finding a job, getting the promotions you deserve at work, getting insurance (or paying the lowest price for it), securing an apartment or house, and more.

This chapter is all about getting you started in repairing your credit so you can get that job, promotion, home, and insurance to protect it. I start with the basics. If you dont understand credit, you cant fix it, so I discuss how credit works, how to apply that knowledge to get what you want, how to deal with the effects of lifes inevitable setbacks on your credit, and how to recover from those setbacks as quickly as possible. Other chapters build on this information, helping to make your credit the best it can be and keep it that way. Why? Because life isnt always fair, but you still need to repair the damage and carry on without being taken advantage of by unscrupulous financial companies or wasting precious years recovering from credit problems that you can avoid or minimize by using the advice in this book.

After youve had a rough patch and fallen behind on your payments, you may think that you can never recover. Between the cost of interest and maybe even collection actions, the situation can be overwhelming. But I assure you that you can reverse the cycle. You can not only reestablish good credit but also keep good credit forever. Forever is a long time, but if you follow my advice, you can banish the credit blues permanently! Its not magic, and it wont cost you another dime. By realistically assessing your situation, using free help if you need it, setting goals, planning your spending and savings, and using credit as part of your overall plan, you can quickly rebuild your credit.

You hear the ads all the time: Settle your debt for pennies on the dollar! You have a right to pay less than you owe! Debt settlement is an often misunderstood option that may work for you, but only if you handle it properly. Many companies that offer debt settlement services help themselves a lot more than they help you. You can avoid huge fees and potential credit damage if you reach a settlement agreement with your lender on your own or if you use your own attorney.

You are personally responsible for the actions of the debt settlement company you hire, and your credit will be ruined in a protracted and adversarial settlement process. Chapter gives you the information you need to decide whether debt settlement is for you and outlines your best options.

Just as you did when you first started establishing credit, I want you to revisit your goals from time to time. When your life changes, your goals should reflect that new reality. Goals that once seemed within easy reach may move from short term to long term. Others may change as you mature. Buying that red sports car may not be as important to you now as it was in your 20s. Take the time to reset your sights, as I explain in Chapter .