Index
Symbols
401(k)s
cashing in early, 82
paying off credit cards, 149
paying off credit cards with, 180–181
A
abusing student loan debt, 179
age of, 23
balances, keeping low, 121
checking/savings, opening, 61–62
explaining, 73
collection, 19
credit cards, co-signers, 61
credit reports, reviewing, 19
identity theft. See identity theft
joint users, 61
opening, 59–63
paying off, 149–151
rehabilitating troubled, 102
savings
emergency funds, 174–176
HSAs, 177
types of needed to have good credit, 71
updating, 151
verifying, 47
accreditation, credit counseling, 90
addresses, checking credit reports for errors, 47
Adelson, Mark, 43
advantages of VantageScore, 44
age of accounts, factors that affect credit scores, 23
alerts
divorces, 184
fraud, 127. See also identity theft
All Your Worth, 180
Allstate, 162. See also insurance
American Express, 24. See also credit cards
AmeriDebt, 89
Annual Credit Report Request Service, 45
applications for credit, factors that affect credit scores, 23
applying for credit, 59–63
assistance for victims of identity theft, 137–141
Association of Independent Consumer Credit Counseling Agencies, 90
authorized user accounts, 32
auto loans, interest rates based on credit scores, 4
automatic payments, 52–53
availability of credit, 7–8
available credit, VantageScore, 40
avoiding
debt consolidation, 56
high mortgages, 177–178
home equity loans, 81
identity theft, 126
insurance claims, 166
B
bad credit scores
affect of, 1–3
cost of, 3–5
balances
accounts, closing, 66
credit cards, paying off, 172–174
credit reports, reviewing, 19
keeping low, 121
moving, 55
paying off, 149–151
paying off monthly, 56–57
VantageScore, 39
verifying, 47
Bankrate.com, 80
2005 reform, 95
credit counseling
affect on credit scores, 74–76
due to high mortgages, 178
due to lack of health insurance, 177
types of, 96–98
verifying, 48
banks, contacting after identity theft, 138
Bayer, Leon, 97
Better Business Bureau, credit counseling, 90
bills
matching resources to, 85–86
paying on time, 50–54, 120–122
prioritizing, 83–85
Birnbaum, Birny, 160
birth dates, checking credit reports for errors, 47
blocking, trade line, 128
boosting credit scores in 30/60 days, 149–151
borrowing, 185–186. See also credit
Boyd, Lamont, 157
Brittain Associates, 180
budgets
creating, 83–85
emergency funds, 174–176
matching resources to bills and debts, 85–86
Buffett, Warren, 174
C
calculation
of credit scores, 20
determining results, 26–27
VantageScore, 39–40
car loans, 185–186
divorces, 183
CardWeb.com, 174
cash-out mortgage refinances, 81
catastrophic health insurance policies, 176
cell phones, reducing exposure to identity theft, 132–133
Census Bureau, 174
Center for Social & Legal Research, 134
Chapter 13 bankruptcy, 83, 96–98
Chapter 7 bankruptcy, 83, 96–98
charges, recurring credit card, 53
checking
identifying information, 46
verification companies, contacting after identity theft, 138
checking accounts, opening, 61–62
claims,
avoiding insurance, 166
links between credit scores and insurance, 159–163
closed accounts, verifying, 47
explaining, 73
CLUE (Comprehensive Loss Underwriters Exchange), 166
co-signers, credit cards, 61
collection accounts, 19
collection agencies, contacting after identity theft, 139
collections
Fair Debt Collection Practices, 107–111
verifying, 48
college students, applying for credit cards, 62
collision insurance, dropping, 169
The Complete Tightwad Gazette, 80
complexity in credit scores, 10
comprehensive insurance, dropping, 169
Comprehensive Loss Underwriters Exchange (CLUE), 166
congress, aiding with credit bureau problems, 143
consolidation loans, 82
consolidation, avoiding debt, 56
Consumers Union site, 136
Consumers Union, identity theft laws, 127
contacting credit bureaus, identity theft, 137
controversies, credit scores, 9
complexity, 10
errors, 9
noncredit decisions, 11
potential unfairness, 11–12
cosigners, 120
cost of medicore/poor credit scores, 3–5
costs, credit counseling, 91
availability of, 7–8
crisis, 77–78
evaluating options, 83–87, 90–98
freeing up cash, 80–82
determing how much to borrow, 185–186
freezing, 135
divorces, 184
identity theft, 123–126
assistance for victims of, 137–141
laws, 127–128
problems with credit bureaus, 142–144
reducing exposure, 129–135
limits, lowering, 67–68
credit bureaus, 19
identity theft, 137
problems with, 142–144
rapid rescoring services, 146–149
accounts
closing, 59
rehabilitating troubled, 102
affect on credit scores, 24
balances, paying off, 172–174
co-signers, 61
college students, 62
credit reports, 19
identity theft, 123–126
laws, 127–128
problems with credit bureaus, 142–144
online bill payment, 54
opting out of solicitations, 132
paying off, 149–151
recurring charges, 53
refusing to use, 71
secured, 119
credit counseling, 74–76, 90–91, 98
credit limits
reducing debt, 55–58
validating, 120
credit scores
checking identifying information, 46
checking verifying account information, 47
disputing errors, 49
improving, 45–46
monitoring collection activities, 48
parsing inquiries, 48
divorces, 182
monitoring, 134–135
repairing, 103
VantageScore, calculating, 39–40
credit scorecards, 24–25
credit scores
affect of, 1–3
affect on insurance, 155–156
improving costs, 164–170
links between, 159–163
pricing premiums, 157–159
scoring models, 163–164
boosting, paying off credit cards and lines of credit, 149–150
calculation of, 20
determining results, 26–27
changes in 1990s, 7–8
controversies, 9
complexity, 10
errors, 9
noncredit decisions, 11
potential unfairness, 11–12
cost of, 3–5
factors that affect, 21
age of accounts, 23
applications for credit, 23
debt, 22
payment histories, 21
types of credit, 24
good, determining, 18
history of, 6–7
improving
applying for credit, 59–63
checking identifying information, 46
closing accounts, 59
disputing errors, 49
monitoring collection activities, 48
parsing inquiries, 48
paying bills on time, 50–54
reducing debt, 55–58
reviewing credit reports, 45–46
verifying account information, 47
maintaining, 172
abusing student loan debt, 179
avoiding high mortgages, 177–178
creating emergency funds, 174–176
health insurance, 176–177
limiting fixed expenses, 179–180
paying off credit card balances, 172–174
paying off credit cards, 180–181
surviving divorce, 181–184
myths about
checking credit reports, 68
closing accounts, 66
credit counseling, 74–76
explaining closed accounts, 73
lowering credit limits, 67–68
only paying interest, 71
refusing to use credit cards, 71
shopping for interest rates, 69–70
unresolved disputes, 72–73
obtaining, 27–31
obtaining with no credit, 60, 64
old debts, 115
rebuilding, 102
adding positive information, 118–120
Fair Credit Reporting Act, 105–106
Fair Debt Collection Practices Act, 107–111
identity theft, 117–118
rehabilitating accounts, 102
repairing credit reports, 103
reviewing credit reports, 104–107
settling old debts, 114–116
statutes of limitations, 111–113
using credit properly, 120–122
repairing, 145
boosting scores in 30/60 days, 149–151
myths about, 151–153
rapid rescoring services, 146–149
truth in lending statements, 8–9
VantageScore, 38
advantages of, 44
calculating, 39–40
comparing to FICO, 40–41
future of, 42–44
rules, 42
credit scoring, financial crisis, cause of, 12–13
CreditBoards.com, 111
CreditInfoCenter.com, 111
CreditInsider.com, 111
creditors, updating accounts, 151
creditors, contacting after identity theft, 138
crimes
identity theft, 123–126
assistance for victims of, 137–141
laws, 127–128
problems with credit bureaus, 142–144
reducing exposure, 129–135
crisis, credit, 77–78
adding positive information, 118–120
evaluating options, 83–87, 90–98
Fair Credit Reporting Act, 105–106
Fair Debt Collection Practices Act, 107–111
freeing up cash, 80–82
identity theft, 117–118
rebuilding scores after, 102
rehabilitating accounts, 102
repairing credit reports, 103
reviewing credit reports, 104–107
settling old debts, 114–116
statutes of limitations, 111–113
using credit properly, 120–122
D
damaging credit scores, closing accounts, 66
Dartmouth, 175
debit cards, 131
identity theft, 128
obtaining, 61
debt
consolidation loans, 82
credit cards. See credit cards
credit crisis, 77–78
adding positive information, 118–120
evaluating options, 83–87, 90–98
Fair Credit Reporting Act, 105–106
Fair Debt Collection Practices Act, 107–111
freeing up cash, 80–82
identity theft, 117–118
rebuilding scores after, 102
rehabilitating accounts, 102
repairing credit reports, 103
reviewing credit reports, 104–107
settling old debts, 114–116
statutes of limitations, 111–113
using credit properly, 120–122
divorces, 183
factors that affect credit scores, 22
matching resources to, 85–86
paying on time, 50–54
reducing what you owe, 55
settlement firms, 83
student loans, abusing, 179
utilization ratios, lowering, 149–151
validation, 108
verifying, 47
debt settlement, 98
debt utilization ratio, 149
deductibles, raising insurance, 165
delinquencies, verifying, 47
department store credit cards, 119
depth of credit, VantageScore, 39
Diner’s Club, 24. See also credit cards
disability insurance, 177
Discover. See also credit cards, 24
disputes, unresolved, 72–73
disputing credit reports, 49, 107–111, 151–152
divorce, affect on credit scores, 181–184
do-not-call list, registering for, 132
documents
identity theft, 137
locking, 130
driving, affect on insurance costs, 168
dropping collision and comprehensive insurance, 169
E
E-Loan, 9
Elias, Stephen, 97
emergency funds, 174–176
Equifax, 19
contact information, 46
Equifax Canada, contact information, 46
equity
avoiding home equity loans, 81
paying off credit cards with, 180–181
errors
credit reports, 46
disputing, 49
reviewing, 104–107
in credit scores, 9
evaluating crisis options, 83–85
Everson, Mark W., 90
examples of FICO 08 consumer scenarios, 33–36
expense, limiting fixed, 179–180
Experian, 19
contact information, 46
explaining
closed accounts, 73
unresolved disputes, 72–73
exposure to identity theft, reducing, 129–135
F
FACTA (Fair and Accurate Credit Transactions Act), 127
factors that affect credit scores, 21
age of accounts, 23
applications for credit, 23
debt, 22
payment histories, 21
types of credit, 24
Fair and Accurate Credit Transactions Act (FACTA), 127
Fair Credit Reporting Act, 105–106, 143
identity theft, 128
Fair Credit Reporting Act (2003), 9
Fair Debt Collection Practices Act, 107–111, 143
Fair Isaac, 8
credit reports, changes in, 19
Fair, Bill, 6
Fannie Mae, changes in credit scores (1990s), 8
Farmer’s Insurance, 162. See also insurance, 162
Federal Trade Commission. See FTC
Fees, credit counseling, 91
FICO, 10
credit scorecards, 24–25
divorces, 184
factors that affect, 21
age of accounts, 23
applications for credit, 23
debt, 22
payment histories, 21
types of credit, 24
formulas, 20
determining results, 26–27
obtaining, 27–31
VantageScore, comparing, 38–41
FICO 08, 31–33
consumer scenarios, 33–36
financial crisis, credit scoring, 12–13
financial documents, locking, 130
FinancialPrivacyNow.org, 136
finding money to pay down debt, 58
fixed expenses, limiting, 179–180
foreclosures, 19
verifying, 48
formulas
credit scores, 20
determining results, 26–27
VantageScore, 39–40
The Fragile Middle Class: Americans in Debt. Medical Bills, 172
fraud, 127. See also identity theft
divorces, 184
Freddie Mac, changes in credit scores (1990s), 8
freeing up cash (to survive a crisis), 80–82
freezing credit, 135
divorces, 184
frequency, payment histories, 21
Frugal University, 80
FTC (Federal Trade Commission), 89
identity theft assistance, 137
future of VantageScore, 42–44
G
garnishments
verifying, 48
wages, 19
gas cards, 119
good credit scores, 18
affect of, 1–3
cost of, 3–5
H
hard inquiries, 19
verifying, 48
Harvard, 175
health insurance, 176–177
health saving accounts (HSAs), 177
high-deductible health insurance policies, 176
histories, reviewing payment histories, 19
improving credit scores, 50–54
VantageScore, 39
verifying, 47
history of credit scores, 6–7
home equity loans
avoiding, 81
paying off credit cards with, 180–181
HSAs (health savings accounts), 177
I
identifying information, checking, 46
identity, creating new, 152
identity theft, 117–118, 123–126
assistance for victims of, 137–141
laws, 127–128
problems with credit bureaus, 142–144
reducing exposure, 129–135
Identity Theft Resource Center, 124, 137
illnesses, 176
improving insurance costs, 164–170
improving credit scores
applying for credit, 59–63
closing accounts, 59
credit reporting
checking identifying information, 46
disputing errors, 49
monitoring collection activities, 48
parsing inquiries, 48
reviewing, 45–46
verifying account information, 47
myths about
checking credit reports, 68
closing accounts, 66
credit counseling, 74–76
explaining closed accounts, 73
lowering credit limits, 67–68
only paying interest, 71
refusing to use credit cards, 71
shopping for interest rates, 69–70
unresolved disputes, 72–73
paying bills on time, 50–54
reducing debt, 55–58
VantageScore, 42
inquiries, 19
FICO 08, 32
installment accounts, 72
installment debt, affect on credit scores, 24
installment loans, 119
installment loans, applying for, 63
affect on credit scores, 155–156
controlling costs, 164–170
links between, 159–163
pricing premiums, 157–159
scoring models, 163–164
credit scores, affect of, 2
disability, 177
health, 176–177
liability, 177
interest, paying only, 71
interest rates
based on credit scores, 4
shopping for, 69–70
Internet
credit bureaus, contacting, 46
credit scores, obtaining, 27–31
online bill payment, 54
IRAs, cashing in early, 82
Isaac, Earl, 6
J-K
judgements, 19
verifying, 48
L
late payments, improving credit scores, 50–54
late payments, verifying, 47
law enforcement, contacting after identity theft, 138
laws, identity theft, 127–128
lawsuits, 19
verifying, 48
legal aid, contacting after identity theft, 140
lenders, requests for credit, 19
liability insurance, 177
liability limits, selecting, 168
liens, taxes, 19
verifying, 48
limitations, statutes of, 111–113
limits
credit
lowering, 67–68
validating, 120
fixed expenses, 179–180
liability, selecting, 168
lines of credit, paying off, 149–151. See also credit
links between credit scores/insurance premiums, 159–163
loans
401(k)s, 82
paying off credit cards, 149
applying for, 63
car, 185–186
consolidation, 82
credit reports, 19
credit scores, affect of, 2
home equity, avoiding, 81
interest based on credit scores, 4
paying on time, 50–54
repayment plans, 86–87
student, abusing, 179
types of needed to have good credit, 71
locking
financial documents, 130
mailboxes, reducing exposure to identity theft, 129
long-term disability insurance, 177
loss ratios, affect of credit scores on insurance, 158
low balances, keeping, 121
lowering debt utilization ratios, 149–151
M
Maguire, Edward, 43
Mail Preference Service, 132
mail, protecting outgoing, 129
mailboxes, reducing exposure to identity theft, 129
maintaining
credit scores, 172
abusing student loan debt, 179
avoiding high mortgages, 177–178
creating emergency funds, 174–176
health insurance, 176–177
limiting fixed expenses, 179–180
paying off credit card balances, 172–174
paying off credit cards, 180–181
surviving divorce, 181–184
low account balances, 121
managing credit crisis, 77–78
adding positive information, 118–120
evaluating options, 83–87, 90–98
Fair Credit Reporting Act, 105–106
Fair Debt Collection Practices Act, 107–111
freeing up cash, 80–82
identity theft, 117–118
rebuilding scores after, 102
rehabilitating accounts, 102
repairing credit reports, 103
reviewing credit reports, 104–107
settling old debts, 114–116
statutes of limitations, 111–113
using credit properly, 120–122
marriage, debt (verifying credit reports), 47
MasterCard, 24. See also credit cards
matching resources to bills and debts, 85–86
McMahon, Ed, 166
Merrill Lynch, 43
MetLife, 157
models
credit score calculations, 20
determining results, 26–27
insurance scores, 163–164
money
matching resources to bills and debts, 85–86
monitoring credit reports, 134–135
mortgages
affect on credit scores, 24
changes in credit scores (1990s), 8
divorces, 183
high, avoiding, 177–178
interest rates based on credit scores, 4
refinancing, 81
moving balances, 55
MSN Money, 80
MyFairCredit.com, 143
myths
credit scores, 66–76
repairing credit, 151–153
MyVesta.org, 80
N
names, checking credit reports for errors, 47
National Association of Consumer Advocates, 140, 143
National Conference of Insurance Legislators, 160
The National Foundation for Credit Counseling, 89–90
NCO Financial Systems, 109
negative entries, verifying, 47
The New Bankruptcy: Will It Work for You?, 97
new credit accounts, opening, 23
no credit, obtaining credit scores with, 60, 64
Nomura Securities, 43
noncredit decisions, use for credit scores, 11
Northern Credit Bureaus, Inc., contact information, 46
numbers, accounts, 47. See also accounts
O
obtaining credit scores, 27–31
old debts, settling, 114–116
online bill payment, 54
online credit reports, 46
online dispute processes, 151. See also disputing
open accounts, verifying, 47
opening
accounts, 59–63
checking/savings accounts, 61–62
new credit accounts, 23
opting out of credit card solicitations, 132
outgoing mail, protecting, 129
P
pay-off plans, 98
paying
bills on time, 120–122
off credit balances, 172–174
paying bills on time, improving credit scores, 50–54
paying only interest, 71
payment histories
factors that affect credit scores, 21
reviewing, 19
VantageScore, 39
verifying, 47
payments
automatic, 52–53
online bill, 54
penalties, cashing in retirement plans early, 82
phishing, 133
phones, reducing exposure to identity theft, 132–133
plans, repayment, 97
police, contacting after identity theft, 138
potential unfairness, credit scores, 11–12
preapproved credit offers, 19
verifying, 48
premiums, affect of credit scores on insurance, 157–159
prioritizing bills, 83–85
prioritizing debt, 56
Privacy Rights Clearinghouse, 137
privacy-protection services, 134
problems with credit bureaus, 142–144
protecting
insurance scores, 170
outgoing mail, 129
public records, 19
R
raising insurance deductibles, 165
rapid rescoring services, 146–149
ratios
debt utilization, lowering, 149–151
loss, affect of credit scores on insurance, 158
rebuilding credit scores, 102
adding positive information, 118–120
Fair Credit Reporting Act, 105–106
Fair Debt Collection Practices Act, 107–111
identity theft, 117–118
rehabilitating accounts, 102
repairing credit reports, 103
reviewing credit reports, 104–107
settling old debts, 114–116
statutes of limitations, 111–113
using credit properly, 120–122
receipts, tracking, 129
recency, payment histories, 21
recent credit, VantageScore, 40
records, public, 19
recurring credit card charges, 53
reducing
exposure to identity theft, 129–135
refinancing mortgages, 81
refusing to use credit cards, 71
registering for do-not-call lists, 132
rehabilitating troubled accounts, 102
repairing
credit reports, 103
credit scores, 145
boosting scores in 30/60 days, 149–151
myths about, 151–153
rapid rescoring services, 146–149
repayment, debt (statutes of limitations), 111–113
bankruptcies, 83
reports. See also credit reports
checking, 68
repairing, 103
requests for credit, 19
results, credit score calculations, 26–27
retirement plans
cashing in early, 82
paying credit cards with, 180–181
reviewing
credit reports, 18–19, 60, 104–107
identifying identity theft, 128
Social Security statements, 133
revolving accounts, 72
paying off, 149–151
revolving credit, affect on credit scores, 24
Rhode, Steve, 80
rights, Fair Credit Reporting Act, 105–106
rules, VantageScore, 42
S
savings accounts
emergency funds, 174–176
HSAs, 177
opening, 61–62
scorecards, 24–25
Sears, identity theft, 126
secured credit cards, 119
secured debt, divorces, 183
securitization, 43
selecting liability limits, 168
settlement firms, debt, 83
settling old debts, 114–116
severity, payment histories, 21
shopping for
insurance rates, 169
interest rates, 69–70
shredders, reducing exposure to identity theft, 129–133
SMR Research, 174
Social Security numbers
identity theft, 123–126
assistance for victims of, 137–141
laws, 127–128
problems with credit bureaus, 142–144
reducing exposure, 129–135
statements, reviewing, 133
Social Security numbers, checking credit reports for errors, 47
soft inquiries, 19
verifying, 48
spam, 133
State Farm, 162. See also insurance
statements, truth in lending, 8–9
states, statutes of limitations, 111–113
statutes of limitations, 111–113
Stephenson, Jim, 109
student loans, abusing, 179
students, applying for credit cards, 62
Sullivan, Teresa A., 172
surviving divorce, 181–184
T
taxes
health insurance, 177
liens, 19
verifying, 48
telemarketing, opting out, 132
Telephone Preference Service, 132
Texas Department of Insurance, 159
theft, identity, 117–118, 123–126
assistance for victims of, 137–141
laws, 127–128
problems with credit bureaus, 142–144
reducing exposure, 129–135
The Tightwad Gazette, 58
Tillinghast-Towers Perrin, 157
time limits, credit reports, 20
tracking receipts, 129
trade line blocking, 128
trade lines, 19
Trans Union, 19
contact information, 46
Trans Union Canada, contact information, 46
truth in lending statements, 8–9
types of bankruptcy, 96–98
types of credit, factors that affect credit scores, 24
U
Unfairness, credit scores, 11–12
universal health insurance, 176
University of California, San Diego, 171
unresolved disputes, 72–73
utilization of credit, VantageScore, 39
utilization ratios, lowering debt, 149–151
V
validation
credit limits, 120
debt, 108
VantageScore, 38
advantages of, 44
calculating, 39–40
comparing to FICO, 40–41
future of, 42–44
rules, 42
Venti, Steven, 175
verification
account information, 47
collections, 48
inquiries, 48
victims of identity theft, assistance for, 137–141
Visa, 24. See also credit cards
W-X-Y-Z
wages, garnishments, 19
verifying, 48
wallets, what to carry, 130
Warren, Elizabeth, 172, 176, 180
Westbrook, Jay L., 172
White, Michelle J., 171
Williams, Julie, 13
Wise, David, 175
www.debt-relief-bankruptcy.com, 97
www.donotcall.gov, 132
www.idtheftcenter.org, 137
www.privacyrights.org, 137