Your Credit Score, Your Money & What's at Stake (Updated Edition): How to Improve the 3-Digit Number that Shapes Your Financial Future

Contents......Page 8
Acknowledgments......Page 18
About the Author......Page 20
Introduction to the Third Edition......Page 22
How Your Credit Score Affects You......Page 26
What It Costs Long Term to Have a Poor or Mediocre Credit Score......Page 28
How Credit Scoring Came into Being......Page 31
How Credit Use Has Changed over the Years......Page 32
Consumer’s Fight for Truth About Credit Scores......Page 33
Credit Scoring’s Vulnerability to Errors......Page 34
Credit Scoring’s Complexity......Page 35
Credit Scoring’s Potential Unfairness......Page 36
Did Credit Scoring Cause the Financial Crisis?......Page 37
2 How Credit Scoring Works......Page 40
Your Credit Report: The Building Blocks for Your Score......Page 43
How Your Score Is Calculated......Page 45
Your Payment History......Page 46
How Much You Owe......Page 47
Your Last Application for Credit......Page 48
Your Credit Scorecard......Page 49
Your Results Might Differ......Page 51
How Do I Get My Score?......Page 52
FICO 08: Changes in Store......Page 56
3 VantageScore—A Revolution or Just More of the Same?......Page 62
The VantageScore Scale......Page 63
How VantageScores Are Calculated......Page 64
Comparing the Scoring Systems......Page 65
VantageScore’s Future......Page 67
So Which Is Better?......Page 69
Step 1: Start with Your Credit Report......Page 70
Check the Identifying Information......Page 71
Carefully Review the Credit Accounts......Page 72
Examine Your Collections and Public Records......Page 73
Dispute the Errors......Page 74
Step 2: Pay Your Bills on Time......Page 75
How to Make Sure Your Bills Get Paid on Time, All the Time......Page 76
You Need to Reduce What You Owe Rather Than Just Moving Your Balances Around......Page 80
You Need to Pay Attention to How Much You Charge—Even If You Pay Off Your Balances in Full Every Month......Page 81
How to Find Money to Pay Down Your Debt......Page 83
Step 5: Apply for Credit Sparingly......Page 84
How to Get a Credit Score if You Don’t Have Credit......Page 85
Credit Scores Without Credit......Page 89
5 Credit-Scoring Myths......Page 90
Myth 1: Closing Credit Accounts Will Help Your Score......Page 91
Myth 2: You Can Boost Your Score by Asking Your Credit Card Company to Lower Your Limits......Page 92
Myth 3: You Can Hurt Your Score by Checking Your Own Credit Report......Page 93
Myth 4: You Can Hurt Your Score by Shopping Around for the Best Rates......Page 94
Myth 6: You Have to Pay Interest to Have a Good Credit Score......Page 96
Myth 7: Adding a 100-Word Statement to Your File Can Help Your Score if You Have an Unresolved Dispute with a Lender......Page 97
Myth 9: Credit Counseling Is Worse Than Bankruptcy......Page 98
Myth 10: Bankruptcy Hurts Your Score So Much That It’s Impossible to Get Credit......Page 100
6 Coping with a Credit Crisis......Page 102
Step 1: Figure Out How to Free Up Some Cash......Page 105
Task 1: Prioritize Your Bills......Page 108
Task 2: Match Your Resources to Your Bills and Debts......Page 110
Task 3: Figuring Out a Repayment Plan......Page 111
The Real Scoop on Credit Counseling......Page 113
Debt Settlement: A Risky Option......Page 116
Should You File for Bankruptcy?......Page 118
The Effects of Bankruptcy Reform......Page 120
The Type of Bankruptcy That You File Matters......Page 121
Step 3: Choose Your Path and Take Action......Page 122
Option 3: Debt Settlement......Page 123
Option 3: Bankruptcy......Page 124
7 Rebuilding Your Score After a Credit Disaster......Page 126
Part I: Credit Report Repair......Page 128
Scrutinize Your Report for Serious Errors......Page 129
Know Your Rights......Page 130
Organize Your Attack......Page 131
What You Need to Know About Unpaid Debts and Collections......Page 132
What You Need to Know About Statutes of Limitations......Page 136
Should You Pay Old Debts?......Page 139
“But You’ve Got the Wrong Guy!”......Page 142
Borrow Someone Else’s History......Page 143
Get Some Credit or Charge Cards if You Don’t Have Any......Page 144
Pay Bills on Time......Page 145
Pace Yourself......Page 146
Don’t Commit the Biggest Credit-Repair Mistakes......Page 147
8 Identity Theft and Your Credit......Page 148
New Options That Might Help......Page 152
Keep Track of Your Receipts......Page 154
Know What’s in Your Wallet......Page 155
Don’t Let Your Debit Card out of Your Sight......Page 156
Don’t Use a Cell or Cordless Phone to Discuss Financial Matters......Page 157
Monitor Your Social Security Statements......Page 158
Monitor Your Credit Reports......Page 159
Consider a Credit Freeze......Page 160
Contact the Credit Bureaus by Phone and Then with a Follow-Up in Writing......Page 162
Contact Bank and Checking Verification Companies......Page 163
Contact the Collection Agencies......Page 164
Don’t Give Up......Page 165
What to Do if the Credit Bureau Won’t Budge......Page 167
9 Emergency! Fixing Your Credit Score Fast......Page 170
Repairing Your Credit in a Matter of Hours: Rapid Rescoring......Page 171
Pay Off Your Credit Cards and Lines of Credit......Page 174
Focus on Correcting the Big Mistakes on Your Credit Reports......Page 175
What Typically Doesn’t Work......Page 176
Closing Troublesome Accounts......Page 177
10 Insurance and Your Credit Score......Page 180
History of Using Credit Scores to Price Insurance Premiums......Page 182
But What’s the Connection?......Page 184
What Goes into an Insurance Score......Page 188
Start Thinking Differently About Insurance......Page 189
Raise Your Deductibles......Page 190
Don’t Make Certain Kinds of Claims......Page 191
Use the Right Liability Limits......Page 193
Shop Around......Page 194
Protect Your Score......Page 195
11 Keeping Your Score Healthy......Page 196
Pay Off Your Credit Card Balances......Page 197
Have an Emergency Fund......Page 199
Have Adequate Insurance......Page 201
Don’t Buy More House Than You Can Afford......Page 202
Don’t Let Your Fixed Expenses Eat Up Your Income......Page 204
Don’t Raid Your Retirement or Your Home Equity to Pay Off Credit Cards......Page 205
Credit and Divorce: How Your Ex Can Kill Your Score......Page 206
Take Action......Page 207
Dealing with Mortgages, Car Loans, and Other Secured Debt......Page 208
Look for Lenders Who Aren’t FICO-Driven......Page 209
In Conclusion: The Three-Year Solution......Page 210
A......Page 212
B......Page 213
C......Page 214
E......Page 217
G......Page 218
I......Page 219
M......Page 220
O......Page 221
R......Page 222
T......Page 223
W-X-Y-Z......Page 224