- 1. Copyright 2010 7 Steps to 720, LLC All Rights
Reserved.Published by 7 Steps to 720 LLC, a California Limited
CompanyVisit our website at www.720CreditScore.comNo part of this
publication may be reproduced in any form by any electronic or
mechanical means without the permission of the publisher, except by
a reviewer who may quote brief passages in a review.While the
author and publisher have taken every precaution in preparing this
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errors or omissions, or for damages resulting from the use of the
information contained herein.
2. important credit factYou probably already know that people
with bad1credit likely have high interest rates on their
creditcards, mortgages, and car loans. But you probablydidnt know
that bad credit means that yourauto insurance premiums may be
higher,yet another reason those three little numbers can havea
six-digit impact on your life! Copyright 7 Steps to 720, LLC. All
rights reserved. Revised 2008-10-08 To Register for My Free Credit
Advantage Teleseminar, visit w w w. Cre d i tE b o o k s. co m | 3
| 3. important credit fact2Of all the credit myths, perhaps the
most damaging isthe following: i have to keep a balance on mycredit
card to keep a good credit score.This mistaken belief causes some
consumers to makeunnecessary interest payments. The truth of
thematter is that credit bureaus have no way of knowingwhether you
pay your balance in full or make monthlypayments. If you have the
financial resources to do so,pay your balance each month. It cant
hurt your creditscore; in fact, it might help your score by
lowering yourutilization rate (the debt you carry in proportion
toyour limit). Copyright 7 Steps to 720, LLC. All rights reserved.
Revised 2008-10-08 To Register for My Free Credit Advantage
Teleseminar, visit w w w. Cre d i tE b o o k s. co m | 4 | 4.
important credit factYou might be surprised to hear that Im in
favor ofadding your high school and college-aged children to3your
credit card accounts. Before you start thinkingIm crazy, let me
explain:If you have good credit and you add your children
asauthorized users to your credit card account, you willhelp them
build their credit scores so that they enteradulthood with strong
credit. Of course, this couldbackfire. If your child is
irresponsible with the account,your score will suffer. To guard
against this, refrainfrom giving your child the credit card.
Instead, simply Copyright 7 Steps to 720, LLC. All rights reserved.
Revised 2008-10-08add his or her name to your account. To Register
for My Free Credit Advantage Teleseminar, visit w w w. Cre d i tE b
o o k s. co m | 5 | 5. important credit factAccording to a U.S.
Public Interest Research Groupsurvey, almost 80 percent of people
have4errors on their credit reports, 25 percentof which are serious
enough to cause a person to beturned down for a job or loan.
Copyright 7 Steps to 720, LLC. All rights reserved. Revised
2008-10-08To Register for My Free Credit Advantage Teleseminar,
visitw w w. Cre d i tE b o o k s. co m| 6 | 6. importantcredit
factYou probably didnt know that increasing yourcredit score might
make you more employ- 5able. Some companies consider your credit
score to bemore than your financial reputation. In fact,
employersconsider it to be a sign of your character, and
somecompanies (especially those hiring employees respon-sible for
money) wont hire a person with poor credit. Copyright 7 Steps to
720, LLC. All rights reserved. Revised 2008-10-08 To Register for
My Free Credit Advantage Teleseminar, visit w w w. Cre d i tE b o o
k s. co m | 7 | 7. importantcredit facton a $300,000, 30-year fixed
rate mort-gage, a person with poor credit (below 6620) would pay
$589 more a month than aborrower with a 720 credit score.$589 a
month! Imagine what you could do with anextra $7,068 a year. You
could buy a new car, save foryour childs college tuition or, with
wise investments,double, triple, or even quadruple the money!
Copyright 7 Steps to 720, LLC. All rights reserved. Revised
2008-10-08 To Register for My Free Credit Advantage Teleseminar,
visit w w w. Cre d i tE b o o k s. co m | 8 | 8. importantcredit
factperhaps the most common (and among themost damaging) error on a
credit report 7is an active duplicate collection notice.If you
notice more than one collection agency reportingyour account to the
credit bureaus as active, youshould work quickly to have this
removed. Accountsthat have been turned over for collection are
often soldby one collection company to another. As a result,
youroutstanding debt could be listed as active multipletimes. A
collection company should list the accountas transferred, sold, or
closed once it is no longerpursuing the debt. Copyright 7 Steps to
720, LLC. All rights reserved. Revised 2008-10-08 To Register for
My Free Credit Advantage Teleseminar, visit w w w. Cre d i tE b o o
k s. co m | 9 | 9. important credit factcollection accounts only
minimally hurtyour credit after two years, and after8four years,
the damage is all but erased.After seven years, a collection
account is wiped fromyour report. Copyright 7 Steps to 720, LLC.
All rights reserved. Revised 2008-10-08To Register for My Free
Credit Advantage Teleseminar, visitw w w. Cre d i tE b o o k s. co
m| 10| 10. importantcredit factif you have poor credit, you might
notqualify for traditional credit card9accounts. instead, open a
secured creditcard. A secured credit card requires you to pay
adeposit equal to or greater than the balance. Obviouslysecured
credit cards do not come with the same privi-leges as regular
credit cards, which allow you to buynow, pay later. With secured
credit cards, you basicallypay now, buy later, and then pay again.
It might notsound like a great deal, but it will help you rebuild
yourcredit so long as the credit card company reports to allthree
major credit bureausbe sure to ask! After six to Copyright 7 Steps
to 720, LLC. All rights reserved. Revised 2008-10-0812 months of
timely payments, ask the company if itwill refund your deposit and
transform your securedcredit card into a regular credit card. To
Register for My Free Credit Advantage Teleseminar, visit w w w. Cre
d i tE b o o k s. co m | 11| 11. importantcredit factdid you know
that you should alwaysapply for credit using the same
first,10middle, and last name? For instance, if yourname is Robert
Michael Jones, Jr., you shouldnt applyas Bob M. Jones, Jr., or any
of the other variations ofyour name. Pick one name and stick with
it, or riskhaving your credit information divided among thevarious
names. Worse yet, it could be merged withanother persons
information. (For instance, if you areRobert Michael Jones, Jr.,
and your father is RobertMichael Jones, the credit bureaus might
combine yourfiles if you do not use Jr. when applying for credit.)
Copyright 7 Steps to 720, LLC. All rights reserved. Revised
2008-10-08That said, if you changed your last name upon
marrying,start applying for credit under your new name. It
mightincrease the likelihood of errors, but the damage willbe
temporary; the new last name is forever.To Register for My Free
Credit Advantage Teleseminar, visit w w w. Cre d i tE b o o k s. co
m | 12| 12. important credit fact 11Do you think the following
statement is true or false?A person cannot qualify for a home loan
or creditcard if s/he has a bankruptcy, a foreclosure, a tax
lien,or a bill turned over for collections.If you think this
statement is false, you are right!while it is true that a person
with ablemished credit history will likely payhigher interest
rates, certain lendersmarket to people with problem credit. Ifyou
fall into this category, you can and should applyfor a credit card
immediately so that you can start Copyright 7 Steps to 720, LLC.
All rights reserved. Revised 2008-10-08rebuilding your history.
However, be aware that theinterest rates will be high, so you
should use creditcards responsibly and pay the bills in full each
monthto avoid paying the interest. To Register for My Free Credit
Advantage Teleseminar, visit w w w. Cre d i tE b o o k s. co m |
13| 13. important credit fact 12You may think that a poor financial
record is a signof poor character. i bet you didnt know thatwalt
disney and mark twain both claimedbankruptcy! Bad credit happens to
all types ofpeople. The true test of character is how a person
dealswith bad credit. Do you ignore it, hope that it goesaway, and
bury your head in the sand? Or do you jumpin, learn how to fix your
mistakes, and move forward? Copyright 7 Steps to 720, LLC. All
rights reserved. Revised 2008-10-08 To Register for My Free Credit
Advantage Teleseminar, visit w w w. Cre d i tE b o o k s. co m |
14| 14. important credit fact 13Are you surprised to learn that you
have severaldifferent credit scores? Before assigning onescore,
most lenders consider your scores from thethree major credit
bureaus (TransUnion, Equifax, andExperian). The lender will
consider the middle scorewhen determining your interest rate for
any given loanor credit card. For instance, if Experian gives you a
721credit rating, TransUnion gives you a 719, and Equifaxa 601,
lenders will consider 719 to be your credit score.Because of this,
you should monitor your report fromeach of the three bureaus.
Copyright 7 Steps to 720, LLC. All rights reserved. Revised
2008-10-08 To Register for My Free Credit Advantage Teleseminar,
visit w w w. Cre d i tE b o o k s. co m | 15| 15. important credit
fact 14Though your payment history accounts for about 35percent of
your credit score, late payments withinsix months have the greatest
impact onyour score while late payments more than24 months old have
little impact on yourscore. The credit-scoring models assume that
yourcurrent behavior is a far more important indicator ofyour
creditworthiness than your past behavior. Yourcurrent behavior,
after all, can better forecast whetheryou are experiencing a
downward financial turn. Forthis reason, if you have one late
payment on an other-wise spotless credit report, you will likely
see a sharp Copyright 7 Steps to 720, LLC. All rights reserved.
Revised 2008-10-08decrease. This is because a negative change in
other-wise positive behavior is considered a warning sign ofa shift
in your financial situation. To Register for My Free Credit
Advantage Teleseminar, visit w w w. Cre d i tE b o o k s. co m |
16| 16. important credit factYou might be surprised to hear that
collection 15companies are notorious for keeping poor records.If
you have an account in collection, you might wantto send a letter
to the collection company asking it toprovide verification that the
debt in question is yours.If a collection company is unable to
verify your debt, itmust remove the item from your credit report.
Copyright 7 Steps to 720, LLC. All rights reserved. Revised
2008-10-08 To Register for My Free Credit Advantage Teleseminar,
visit w w w. Cre d i tE b o o k s. co m | 17| 17. important credit
fact 16Some savvy consumers think they will save money
bytransferring their credit card debt to the card with thelowest
interest rate. You are probably surprised to hearthat transferring
balances might cost you more moneythan you save.How?If you transfer
all your debt to the one credit cardwith the lowest interest rate,
you are increasing yourutilization rate (the debt you carry in
proportion to thelimit) on that card, which will cause your credit
score Copyright 7 Steps to 720, LLC. All rights reserved. Revised
2008-10-08to drop. A lower score translates into a higher
interestrate on future loans or credit scores. To Register for My
Free Credit Advantage Teleseminar, visit w w w. Cre d i tE b o o k
s. co m | 18| 18. importantcredit fact 17Did you know that
statistics show you will likely bea victim of identity theft at
least one in the next 10years? On average, victims spend 60 hours
resolvingthe problems caused by identity theft, one of which is
adamaged credit score. To protect yourself and your credit score
from identitytheft, consider the following: Never respond to emails
that ask you to verify account or credit card numbers. Simply push
delete, even if the e-mail address of the sender looks genuine.
Legitimate businesses know to never send sensitive information
through e-mail. Copyright 7 Steps to 720, LLC. All rights reserved.
Revised 2008-10-08 Dont make online purchases unless the site is
secured. If you are unsure, call the business and make a purchase
over the phone. Speaking of phones, never give out account numbers
or Social Security numbers over the phone unless you initiated the
call. Review your bank and credit card statement each month, and
check your credit report quarterly. If you have good financial
records, you will recognize signs of identity fraud more quickly on
your credit card statement or credit report. | 19 | 19.
importantcredit factWhen you co-sign on an account, credit bureaus
18consider you equally responsible for the loan as theactual
borrower. For this reason, I caution against beinga co-signer
unless you are willing to assume financialresponsibility for the
debt. If you do co-sign on a loan,take the following precautions:
Insist that bills be sent to your address, or track the account
online to make sure the borrower is paying on time. If not, you
will need to make the payments on the borrowers behalf to protect
your credit. More effectively, decide to pay the bill directly from
the get-go, and ask the borrower to reimburse you. This way, you
Copyright 7 Steps to 720, LLC. All rights reserved. Revised
2008-10-08 will always be in control of the payment, and of your
credit score. Contact the creditor and see if the loan can be
refinanced in the borrowers name after a year of timely payments.
To Register for My Free Credit Advantage Teleseminar, visit w w w.
Cre d i tE b o o k s. co m | 20| 20. important credit fact 19Did
you know that some credit card companies refuseto report your
proper credit card limits? Indeed, creditcard companies often
either fail to report the limit, orthey report a lower limit than
you have. This causesyour utilization rate to be reported as higher
than it is,which hurts your credit score.Why do credit card
companies do this?They dont want to lose their client base. If
other creditcard companies see that you have a high balance anda
strong credit score, they might solicit your business. Copyright 7
Steps to 720, LLC. All rights reserved. Revised 2008-10-08By
failing to report the correct credit limit, credit cardcompanies
keep your name off mailing lists targeted toconsumers with specific
credit limits. This helps ensurethat your credit card company
doesnt lose your busi-ness to a competitor offering better terms.To
Register for My Free Credit Advantage Teleseminar, visit w w w. Cre
d i tE b o o k s. co m | 21| 21. important credit fact 20Tucking
your credit cards away in your underweardrawer and refusing to use
them is silly. If your cardsbecome inactive, your credit will
suffer, so make sureyou use your credit cards at least once a
month. If youdislike having debt, consider paying a regular bill
(e.g.,cable) using your credit card. Then pay it off in fulleach
month. This will preserve your credit and allowyou to live without
debt (and without paying interest). Copyright 7 Steps to 720, LLC.
All rights reserved. Revised 2008-10-08 To Register for My Free
Credit Advantage Teleseminar, visit w w w. Cre d i tE b o o k s. co
m | 22| 22. important credit fact 21You probably didnt know that
closing your credit cardscould hurt your score, and it will never
help your score.Because the length of time you have had credit
affectsabout 15 percent of your credit score, closing a
creditaccount will lower the average age of your accounts, asdoes
allowing a credit card to become inactive by usingit less than once
a month. Copyright 7 Steps to 720, LLC. All rights reserved.
Revised 2008-10-08 To Register for My Free Credit Advantage
Teleseminar, visit w w w. Cre d i tE b o o k s. co m | 23| 23.
important credit fact 22Did you know that consumer credit
counseling will notdirectly hurt your credit score? Though credit
scoringmodels no longer consider this a factor when assigninga
credit rating, your credit score might be indirectlyharmed by
hiring a consumer credit counselingcompany. A consumer credit
counseling company willhandle all matters regarding your debt. This
meansthat creditors will not call you when a bill is late, theywill
call the consumer credit counseling company. Ifthe company fails to
pay your bill on time, you willnot know because the creditor has
stopped communi-cating with you. And if a consumer credit
counseling Copyright 7 Steps to 720, LLC. All rights reserved.
Revised 2008-10-08company fails to pay your bills on time, guess
what?Your credit score suffers. To Register for My Free Credit
Advantage Teleseminar, visit w w w. Cre d i tE b o o k s. co m |
24| 24. important credit factYou might be surprised to hear that
your scorewill not be harmed by inquiries into your 23own credit
report. If you request your own creditscore, the inquiry will show
up on your credit report asa soft inquiry. Unlike hard inquiries
(those pulledby potential lenders as a way of determining
whetherthey want to approve a loan or credit application),
softinquiries do not affect your credit score. Copyright 7 Steps to
720, LLC. All rights reserved. Revised 2008-10-08 To Register for
My Free Credit Advantage Teleseminar, visit w w w. Cre d i tE b o o
k s. co m | 25| 25. important credit factDid you know that your
salary does notaffect your credit score? You could have an 24income
that falls below the federal poverty level andstill have spotless
credit. Or, you could be a million-aire with awful credit. Your
credit score is a reflectionof how responsible you are with your
money, not howmuch money you have. Copyright 7 Steps to 720, LLC.
All rights reserved. Revised 2008-10-08 To Register for My Free
Credit Advantage Teleseminar, visit w w w. Cre d i tE b o o k s. co
m | 26| 26. important credit fact 25Are you surprised to hear that
late payments thatoccur less than 30 days past the due date do not
hurtyour credit score? Its true that paying a bill late isperhaps
the most common way to damage your creditscore. What you may not
know is that the bureaus donot consider a payment late until it is
30 days or morepast the due date. (Note that the credit card
companieswill still charge you a hefty late payment fee if you
payyour bill even one day past the due date.) Copyright 7 Steps to
720, LLC. All rights reserved. Revised 2008-10-08 To Register for
My Free Credit Advantage Teleseminar, visit w w w. Cre d i tE b o o
k s. co m | 27| 27. important credit fact 26If you rent a home, you
might be surprised to learnthat your credit score most likely does
notconsider your rent payment history, unlessyou are evicted.
However, you would be wise to payyour rent on time every month
regardless. Some lendersmight consider your rent payment history in
additionto your credit when determining whether they want toapprove
your loan or credit application. As well, a newcredit scoring
system, the FICO Expansion System,will consider your rent payment
history. This systemis relatively new and unused, so dont count on
timelyrent payments to boost your credit score. Copyright 7 Steps
to 720, LLC. All rights reserved. Revised 2008-10-08 To Register
for My Free Credit Advantage Teleseminar, visit w w w. Cre d i tE b
o o k s. co m | 28| 28. important credit fact 27One of my clients
was relieved to learn that hercredit report did not list the late
notices she regularlyreceived from Blockbuster for failing to pay
the fineswhen she returned her video rentals a week too late.You
might also be surprised to learn that fico, thestandard
credit-scoring system, does notconsider your payment history on
utilitybills (such as gas, electric, phone, cable, or cell
phonebills). However, if you fail to pay these bills and theyare
turned over for collection, your credit will bedamaged. Copyright 7
Steps to 720, LLC. All rights reserved. Revised 2008-10-08 To
Register for My Free Credit Advantage Teleseminar, visit w w w. Cre
d i tE b o o k s. co m | 29| 29. important credit factsome banks
will insist you pay youraccounts in collection before giving you
28a home loan. If this is the case, try negotiating fora letter of
deletion. However, negotiating for a letter ofdeletion often takes
time you dont have. In this case,pay the collection item and be
done with it.Remember that paying your collection accounts
willdamage your credit, the last thing you want to dobefore making
a large purchase. What if the lenderpulls your credit report again
and sees that your creditscore has dropped? To avoid this, pay your
collection Copyright 7 Steps to 720, LLC. All rights reserved.
Revised 2008-10-08at the close of escrow. This way, you will
preserve yourcredit score until the last possible minute, and you
willsatisfy the banks request. To Register for My Free Credit
Advantage Teleseminar, visit w w w. Cre d i tE b o o k s. co m |
30| 30. important credit factif you buy your credit report, you
might besurprised to learn that your credit score 29isnt always
included. Your credit report liststhe details of all your credit
accounts for the last sevenyears. Your credit score is the
three-digit number thatindicates your creditworthiness, as
determined by theitems on your credit report. When purchasing a
creditreport, you might also have to pay an additional fee toview
your credit score. Copyright 7 Steps to 720, LLC. All rights
reserved. Revised 2008-10-08 To Register for My Free Credit
Advantage Teleseminar, visit w w w. Cre d i tE b o o k s. co m |
31| 31. important credit factDo you know what lenders consider when
deciding 30whether to approve your home loan? While your
creditscore is the single most important factor, it is not theonly
factor. Lenders determine your credit worthinessby looking at your
credit, your income, your savings(both before and after closing a
loan), and your downpayment.Still others will ask your landlord to
provide verifica-tion of rent, detailing the date of your rent
checks. Ifyou have multiple late rent payments, the lender
willconsider you a high-risk borrower. (For this reason, Copyright
7 Steps to 720, LLC. All rights reserved. Revised 2008-10-08always
write your rent checks no later than the duedate of your rent, even
if you do not plan on deliveringthe check for a few days). To
Register for My Free Credit Advantage Teleseminar, visit w w w. Cre
d i tE b o o k s. co m | 32| 32. important credit fact 31You might
be surprised to learn that the followingstatement is a myth: The
less credit I have, the bettermy score will be. This simply isnt
true, regardless ofwhat your grandfather says. Credit bureaus want
tosee that you can handle credit responsibly. Consumerswho declare
bankruptcy often wipe their hands clean ofdebt, saying they never
want another credit card again.But what they may not realize is
that no credit isjust as bad as poor credit. The best way to havea
solid credit score is to have a healthy mix of creditand a solid
payment history. You have to prove to thebureaus that you have the
discipline to handle credit Copyright 7 Steps to 720, LLC. All
rights reserved. Revised 2008-10-08responsibly, and the only way to
do this is to have aproven track record. To Register for My Free
Credit Advantage Teleseminar, visit w w w. Cre d i tE b o o k s. co
m | 33| 33. importantcredit factThough approximately 80 percent of
people have32errors on their credit reports, errors older thantwo
years are not likely hurting yourcredit score that much. As well,
many errors arelow-priority errors that are not worth correcting.
Copyright 7 Steps to 720, LLC. All rights reserved. Revised
2008-10-08To Register for My Free Credit Advantage Teleseminar,
visitw w w. Cre d i tE b o o k s. co m| 34| 34. important credit
fact 33You might be surprised to learn that your creditscore will
drop if you qualify for a newhome or auto loan. If you have a new
home orauto loan, credit bureaus see you as more of a risk
thansomeone with an older loan, which presumably hasmore equity.But
dont worry! After a month or two of on-timepayments, your credit
score will start to climb again. Copyright 7 Steps to 720, LLC. All
rights reserved. Revised 2008-10-08 To Register for My Free Credit
Advantage Teleseminar, visit w w w. Cre d i tE b o o k s. co m |
35| 35. important credit fact 34Did you know that you can use
technology to helpraise your credit score? If you struggle to pay
your billson time because you are too busy, or because you donot
manage your money well, try this:Sit down with a calendar and a
copy of all your regularbills. Then create automatic payments on
all yourcredit cards, mortgages, installment loans, and
financeaccounts. If you are a compulsive spender, this mighthelp
curb unnecessary expenditures by forcing you topay the required
bills each month. Copyright 7 Steps to 720, LLC. All rights
reserved. Revised 2008-10-08 To Register for My Free Credit
Advantage Teleseminar, visit w w w. Cre d i tE b o o k s. co m |
36| 36. important credit factDid you know that you can boost your
creditscore and lower your personal debt if 35you establish
separate credit from yourspouse? Entrepreneurs in particular can
benefitfrom this tip, which allows you to use your spousescredit
when applying for a loan or line of credit. Itworks like this: When
applying for credit, transfer highcredit card balances to your
spouses credit cards. Asyour outstanding debt is lowered, your
credit score willincrease, which makes you look like a more
favorablecandidate for a loan. Of course, you will have to
returnthe favor if your spouse ever needs a quick credit score
Copyright 7 Steps to 720, LLC. All rights reserved. Revised
2008-10-08increase! To Register for My Free Credit Advantage
Teleseminar, visit w w w. Cre d i tE b o o k s. co m | 37| 37.
about the aUtHOr Recognized as a thought leadeR in the credit
industry, Philip Tirone speaks nationwide on the problems with our
credit scoring system and how it erroneously burdens America.After
closing $500 million in residential home financing, Philip became
attentive to the thousands of dollars in extra interest payments
being wasted by Americans because of their credit scores. His
mission is clear: educate Americans on how to increase their
monthly disposable income without changing their lifestyle, simply
by understanding the credit scoring process. Realizing the strain
this lack of credit transparency has on the American financial
system, Philip has made a personal commit- ment to show consumers
how to navigate our credit system until our credit laws are changed
and are fair to consumers. Philips book 7 StepS to a 720 Credit
SCore, dispels the misconceptions around our credit-scoring system
and guides consumers who are strug- gling with bankruptcy,
foreclosure, short sale, divorce, and many other experiences that
impact a persons credit score.Philip and his programs have been
featured in the Los Angeles Times, Wall Street Journal, Womans
World Magazine, San Francisco Chronicle, Bottom Line Magazine, and
the New York Times bestseller Secrets of the Young &
Successful. Additionally, Philip has been a frequent guest lec-
turer at UCLA Anderson School of Business and Management. Philip
currently resides in the Los Angeles area with his wife and three
children.| 38|
