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Your Credit Score: How to Improve the 3-Digit Number That Shapes Your Financial Future, Fifth Edition

Book Description

Improve your credit score, for real, with the #1 best-selling guide you can trust! Today, a good credit score is essential for getting credit, getting a job, even getting car insurance or a cellphone. Now, best selling journalist Liz Pulliam Weston has thoroughly updated her top-selling guide to credit scores, with crucial new information for protecting (or rebuilding) yours.

Weston thoroughly covers brand-new laws and rules surrounding credit scoring — including some surprising good news and some frightening new risks. Don’t settle for an out-of-date guide to credit scoring, when Your Credit Score, Fifth Edition offers brand-new coverage of all this, and more:

  • Recent consumer-friendly reforms in lending, credit score calculation, and credit bureau behavior — and how to take advantage of them

  • How you can finally get your credit disputes reviewed by an actual human being

  • Why recent medical debts shouldn’t impact your score anymore

  • How to get a legitimately free FICO score without getting ripped off

  • How lenders have recently loosened their criteria, making it easier to get loans even if your credit isn’t perfect

  • Important new options for student loan borrowers — including brand-new ways to dramatically limit your payments

  • How tax refund fraud is soaring — and the one little-known way to avoid becoming a victim

  • The disappearance of "manual underwriting": why it’s now virtually impossible to get a mortgage without credit scores

  • Weston updates her guidance on raising your FICO score... fighting lower limits or higher rates... maintaining the right mix of cards and balances... bouncing back from bad credit... choosing credit "solutions" that help, not hurt... explodes both new and old myths about credit scoring… and much more.

  • Your Credit Score is for every consumer who is concerned about improving or protecting their credit — and it’s so up-to-date and useful, thousands of financial professionals use it, too!

    Table of Contents

    1. About This eBook
    2. Title Page
    3. Copyright Page
    4. Praise for the Previous Edition of Your Credit Score
    5. Contents
    6. Acknowledgments
    7. About the Author
    8. Introduction
    9. 1. Why Your Credit Score Matters
      1. How Your Credit Scores Affect You
      2. What It Costs Long Term to Have Poor or Mediocre Credit Scores
      3. How Credit Scoring Came into Being
      4. How Credit Use Has Changed over the Years
      5. Consumer’s Fight for Truth About Credit Scores
      6. Credit Controversies
        1. Credit Scoring’s Vulnerability to Errors
        2. Credit Scoring’s Complexity
        3. Credit Scoring’s Use for Noncredit Decisions
        4. Credit Scoring’s Potential Unfairness
    10. 2. How Credit Scoring Works
      1. What Is a Good Score?
      2. Your Credit Report: The Building Blocks for Your Score
      3. How Your Score Is Calculated
      4. The Five Most Important Factors
        1. Your Payment History
        2. How Much You Owe
        3. How Long You’ve Had Credit
        4. Your Last Application for Credit
        5. The Types of Credit You Use
      5. Your Credit Scorecard
      6. Your Results Might Differ
      7. How Do I Get My Score?
      8. What Hurts and for How Long
      9. New Versions of the FICO Score
    11. 3. VantageScore—A FICO Rival Emerges
      1. The VantageScore Scale
      2. How VantageScores Are Calculated
      3. So Which Is Better?
      4. VantageScore’s Future
      5. Other Scores Lenders Use
    12. 4. Improving Your Score—The Right Way
      1. Step 1: Start with Your Credit Report
        1. Check the Identifying Information
        2. Carefully Review the Credit Accounts
        3. Parse Through Your Inquiries
        4. Examine Your Collections and Public Records
        5. Dispute the Errors
      2. Step 2: Pay Your Bills on Time
        1. How to Make Sure Your Bills Get Paid on Time, All the Time
      3. Step 3: Pay Down Your Debt
        1. You Need to Reduce What You Owe Rather Than Just Moving Your Balances Around
        2. You Might Need to Change Your Approach to Paying Off Debt
        3. You Need to Pay Attention to How Much You Charge—Even if You Pay Off Your Balances in Full Every Month
        4. How to Find Money to Pay Down Your Debt
      4. Step 4: Don’t Close Credit Cards or Other Revolving Accounts
      5. Step 5: Apply for Credit Sparingly
        1. How to Get a Credit Score if You Don’t Have Credit
      6. Credit Scores Without Credit
    13. 5. Credit-Scoring Myths
      1. Myth 1: Closing Credit Accounts Will Help Your Score
      2. Myth 2: You Can Boost Your Score by Asking Your Credit Card Company to Lower Your Limits
      3. Myth 3: You Can Hurt Your Score by Checking Your Own Credit Report
      4. Myth 4: You Can Hurt Your Score by Shopping Around for the Best Rates
      5. Myth 5: You Don’t Have to Use Credit to Get a Good Credit Score
      6. Myth 6: You Have to Pay Interest to Have a Good Credit Score
      7. Myth 7: Adding a 100-Word Statement to Your File Can Help Your Score if You Have an Unresolved Dispute with a Lender
      8. Myth 8: Your Closed Accounts Should Read “Closed by Consumer,” or They Will Hurt Your Score
      9. Myth 9: Credit Counseling Is Worse Than Bankruptcy
      10. Myth 10: Bankruptcy Hurts Your Score So Much That It’s Impossible to Get Credit
    14. 6. Coping with a Credit Crisis
      1. Step 1: Figure Out How to Free Up Some Cash
      2. Step 2: Evaluating Your Options
        1. Task 1: Prioritize Your Bills
        2. Task 2: Match Your Resources to Your Bills and Debts
        3. Task 3: Figuring Out a Repayment Plan
      3. The Real Scoop on Credit Counseling
      4. Debt Settlement: A Risky Option
      5. Should You File for Bankruptcy?
      6. The Effects of Bankruptcy Reform
      7. The Type of Bankruptcy That You File Matters
      8. Should You Walk Away from Your Home?
      9. Step 3: Choose Your Path and Take Action
        1. Option 1: The Pay-Off Plan
        2. Option 2: Credit Counseling
        3. Option 3: Debt Settlement
        4. Option 4: Bankruptcy
    15. 7. Rebuilding Your Score After a Credit Disaster
      1. Part I: Credit Report Repair
      2. Scrutinize Your Report for Serious Errors
      3. Know Your Rights
        1. Organize Your Attack
        2. What You Need to Know About Unpaid Debts and Collections
        3. What You Need to Know About Statutes of Limitations
        4. Should You Pay Old Debts?
        5. “But You’ve Got the Wrong Guy!”
      4. Part II: Adding Positive Information to Your File
        1. Try to Get Positive Accounts Reported
        2. Borrow Someone Else’s History
        3. Get Some Credit or Charge Cards if You Don’t Have Any
      5. Part III: Use Your Credit Well
        1. Pay Bills on Time
        2. Use the Credit You Have
        3. Keep Your Balances Low
        4. Pace Yourself
        5. Don’t Commit the Biggest Credit-Repair Mistakes
    16. 8. Identity Theft and Your Credit
      1. Options That Might Help
        1. Credit Freezes
        2. FACTA Rights
        3. Chip-and-PIN Cards
      2. How to Reduce Your Exposure to Identity Theft
        1. Buy a Shredder
        2. Get a Locking Mailbox
        3. Protect Your Outgoing Mail
        4. Be Careful with Your Tax Returns
        5. Keep Your Financial Documents Under Lock and Key
        6. Get Stingy with Your Social Security Number
        7. Know What’s in Your Wallet
        8. Ask About Shredding Policies
        9. Don’t Let Your Debit Card out of Your Sight
        10. Monitor Your Accounts
        11. Opt Out of Credit Card Solicitations, Junk Mail, and Telemarketing
        12. Be Cautious About Using Your Smartphone for Financial Matters
        13. Be Wary of Telephone Solicitors and Emails Purporting to Be from Financial Institutions
        14. Be Smarter About Social Media
        15. Safeguard Your Social Security Number
        16. Monitor Your Credit Reports
        17. Consider a Credit Freeze
      3. What to Do if You’re Already a Victim
        1. Keep Good Notes of Every Conversation You Have Regarding the ID Theft
        2. Contact the Credit Bureaus by Phone and Then with a Follow-Up in Writing
        3. Contact the Creditors by Phone and Then Follow Up in Writing
        4. Contact the Police or Local Sheriff
        5. Contact Bank and Checking Verification Companies
        6. Contact the Collection Agencies
        7. Get Legal Help
        8. Don’t Give Up
      4. What to Do if the Credit Bureau Won’t Budge
    17. 9. Emergency! Fixing Your Credit Score Fast
      1. Repairing Your Credit in a Matter of Hours: Rapid Rescoring
      2. Boosting Your Score in 30 to 60 Days
        1. Pay Off Your Credit Cards and Lines of Credit
        2. Use Your Credit Cards Extremely Lightly
        3. Focus on Correcting the Big Mistakes on Your Credit Reports
        4. Use the Bureaus’ Online Dispute Process
        5. See if You Can Get Your Creditors to Report or Update Positive Accounts
      3. What Typically Doesn’t Work
        1. Disputing Everything in Sight
        2. Creating a “New” Credit Identity
        3. Closing Troublesome Accounts
    18. 10. Insurance and Your Credit Score
      1. History of Using Credit Scores to Price Insurance Premiums
      2. But What’s the Connection?
      3. What Goes into an Insurance Score
      4. Keeping a Lid on Your Insurance Costs
        1. Start Thinking Differently About Insurance
        2. Raise Your Deductibles
        3. Don’t Make Certain Kinds of Claims
        4. Be a Defensive Driver
        5. Use the Right Liability Limits
        6. Drop Collision and Comprehensive on Older Cars
        7. Shop Around
        8. Protect Your Score
    19. 11. Can Bad Credit Cost You a Job?
    20. 12. Keeping Your Score Healthy
      1. The Do’s of Credit Health
        1. Pay Off Your Credit Card Balances
        2. Have an Emergency Fund
        3. Have Adequate Insurance
      2. The Don’ts of Credit Health
        1. Don’t Buy More House Than You Can Afford
        2. Don’t Overdose on Student Loan Debt
        3. Don’t Let Your Fixed Expenses Eat Up Your Income
        4. Don’t Raid Your Retirement or Your Home Equity to Pay Off Credit Cards
      3. Credit and Divorce: How Your Ex Can Kill Your Score
        1. Get Your Credit Reports
        2. Take Action
        3. Don’t Be Late
        4. Dealing with Mortgages, Car Loans, and Other Secured Debt
        5. Consider a Fraud Alert or Credit Freeze
      4. In Conclusion: The Three-Year Solution
    21. Index