The Big Score: an interview with author Linda Ferrari

Photo courtesy of Linda Ferrari

I know I'm getting older because I now worry about things like my credit score. In my twenties, however, I couldn't have cared less. Back then, I didn't know the difference between my credit report and the Drudge Report. As long as I could still get credit from somewhere, anywhere, I was happy. Until one day when I tried to buy a home.

Turns out, I had a judgment from years earlier that the lender said I would have to settle in order to secure the mortgage before the closing date. The original judgment was for a $1,200 loan that I had cosigned for a coworker and friend. Three months later, I got a new job and never saw the coworker again, who apparently ended up defaulting on the loan a few months later. Fast-forward 8 years and the judgment in my name as a cosigner had grown to almost $9,000. I ended up settling the debt for $6,000 because it was the only way I was able to get the house to close on time.

Don't let something like this happen to you. Your credit score is the key to your long-term financial success, especially in today's tough economy. That one little number helps lenders decide, not only if you're a good credit risk, but how much that credit will cost you in interest rates for credit cards, auto loans, student loans, and mortgages. Even utility companies, landlords, and employers sometimes make decisions based on your credit score. It may seem unfair, but that's the system we have, and you're responsible for making the right decisions with your credit.

To help you avoid the mistakes that I've made, I contacted Linda Ferrari, author of The Big Score: Getting It and Keeping It, for advice on how to take charge of your credit score. Unlike the financial generalist that you might find in the media or on the internet, Linda is President of Credit Resource Corp. in California, and has personally dug through thousands of credit reports. She knows the tricks and secrets for responsibly managing credit, and The Big Score is a straight-forward, easy-to-read and understand guide to credit success for people looking to make the most of their credit.

I met up with Linda recently and had a few questions for her:

Q. How does the information in your book differ from information that I can find on the Internet or in other credit books?

A. The Big Score is unlike any other credit education and credit improvement book because it is written by a true credit repair expert. The lion's share of credit education comes from columnists and financial generalists who have no frontline experience with credit repair, rendering their information useless at best, and sometimes even destructive at worst.

I have repaired literally thousands of peoples' credit. I have reviewed more than 15,000 credit reports, a number that dwarfs most studies that cite statistical results across a wide swath of credit improvement statistics. My success ratio makes me an industry expert and an authoritative voice for consumers. And I believe that the information contained in my book packs the potential to change hundreds of millions of peoples' lives for the better and for good.

Q. Can someone actually take steps to improve his or her own credit score? Is it even legal?

A. Yes! If someone has a good knowledge of the credit reporting and scoring system, and the right tools to take action, they can legally repair their own credit. This is exactly why I wrote my book – to make sure that people had access to the crucially important information they need to protect, improve, and maintain their credit reports and scores on their own. Because in this system, you are definitely guilty until you prove yourself innocent.

The good news is that there is a ton of laws on the books that enable us to achieve fairness with regard to the credit bureaus, creditors and collection agencies. You don't have to learn them all. In fact, you would have to become a credit expert to understand the entire credit code. So for the purpose of this article, the ACT which gives the most protection to the consumer when it comes to credit repair is The Fair Credit Reporting Act (FCRA). This law gives people the right to true and accurate credit reporting.
 

The right to dispute any credit listing on your credit reports that you feel may be inaccurate, untimely, misleading, biased, incomplete or unverifiable. I highly recommend that anyone who is thinking about taking steps to repair their own credit read this Act first.

The credit bureaus and creditors are in business because of us and for us. It's our records that make them money and they are obligated to report our records correctly and fix errors in a timely fashion. When you raise an issue with the credit bureaus or a creditor and they refuse to back down, even though you know you are right, you have an obligation to yourself to exercise your right to protect your name and your creditworthiness. If you do your research, and work hard enough, you can definitely do it on your own.

Q. There's so many scams out there about credit repair. How do we know who to trust and who to avoid?

A. Don't Use Credit Cards – Pay Everything In Cash…Pay Off All Collections Before Applying for A Loan…Close Accounts You Don't Need or Use…Pay Off Your Auto Loan So Your Debt Ratio Goes Down

All sounds like great advice, right? And it may be for some things, but I can tell you firsthand that all of these items will negatively impact your credit scores. As you can see, it's not always easy to separate good advice from bad, and taking action on bad advice can cause an instant drop of up to 100 points or more to your credit scores. Trust me on this. Here are some great tips on separating the good from the bad when it comes to Credit Repair Companies:

• Get Educated First. Knowing how to separate good advice from bad is not easy, but it can be done if you do your research. Knowledge is power, right? Once you know some of the key factors that go into credit reports and scores, it will be easy for you to determine whether or not the credit specialist you are talking to or taking advice from truly knows how credit scores are calculated. Without this knowledge, it would be impossible for them to create a strategy to successfully improve your credit scores. My book is a great resource for this, but you can also do your research on the Federal Trade Commission Site at www.ftc.gov.
   
• Ask for a referral. Asking for a referral from a source that you can trust is a great step. In many cases you will find that your realtor, your mortgage professional, your accountant, or your attorney can recommend a trustworthy credit improvement expert or firm that can answer your questions.
   
• Don't Buy Into a Sales Pitch. Firms that advertise on television or in the newspaper are generally staffed with salespeople, not specialists who can help you. My company has never advertised to the consumer directly. We have always received our business primarily through word of mouth.
   
• Participate. One of the reasons my program is so successful is that I require participation from my clients. I load them up with education, and I require that they manage their credit in a specific manner. If a Credit Repair Firm is not asking for your participation, then you should go somewhere else.
   

Q. How long does it take to make a difference? I know I can't legally remove negative items that are accurate from my credit report, but what can I do to start creating a good credit history?

A. When it comes to cleaning up negative history, you have to be realistic about timing. It just makes sense that if you walk 50 miles, you have to come back – 50 miles. However, I know I am repeating myself, but if you arm yourself with knowledge and tools, you can get back a lot faster!

If you have credit challenges such as collections, charge-offs and public records, then allow at least 6-12 months to start seeing substantial improvement in your credit scores. However, if your credit challenges are basic, which includes general clean-up, credit card balance issues, or not enough credit, then you need at least 3-6 months.

In the meantime, there are several things that can be done to start re-establishing new credit immediately: Reading my Special Report, Save Your Credit – Save Your Life: A 10-Step Action Plan to Protect and Improve Your Credit, is a great place to get started. Readers can download it for free on my site at www.lindaferrari.com.

Q. Anything else readers should know?

A. Yes. I want readers to realize that managing their credit scores and reports is more important now than it's ever been before. And it's not just about buying a new home or car anymore. Credit scores can mean thousands of dollars saved – or paid, which directly impacts retirement savings, a significant concern in this nation right now; credit scores can mean whether or not someone gets a job or a well-deserved promotion; whether or not they can send their kids to college, and soon, credit scores will become a part of the admission procedure at your local hospital – It's called MedFICO.

What this means is that people must become proactive in understanding and managing their credit better. The scoring system as it stands today has many flaws. But it's the only system we have. When you have a clear picture of how the credit scoring system works, you will no longer be held captive by your creditors. You will receive offers that are available to only the most creditworthy individuals, and rather than struggle to keep up, you will be able to direct your financial future. Read my book. It will change your life.

The Big Score: Getting It and Keeping It, $24.95, 280 pages (also available for purchase through www.Amazon.com)