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LEARN HOW TO START, RUN, OR GROW YOUR CREDIT REPAIR BUSINESS

Understand Credit Repair with These Top 10 Buzzwords!

By: Daniel Rosen September 20, 2022

Do you speak the language of Credit Repair?  

All financial services have their own unique terminology. 

But believe it or not, that terminology can sometimes confuse and intimidate people and prevent them from seeking financial services.

So on this week’s Podcast, I list the Top Ten terms everyone needs to know!

 

Confusion and intimidation affect consumers' financial decisions.

A study by the Milken Institute determined that 43% of adults in the United States are considered financially illiterate. That’s a huge percentage of the population!  And a survey by OnePoll found that 41% of Americans are intimidated by their own finances.

And who can blame them?!

We’re not taught personal finance in school, and financial fine print often reads like it was designed to be confusing. 

But how does this relate to us?

Credit Repair, even though it’s been around for a few decades, it is still a relatively new industry, so the problem of customers not knowing what we do or what our words mean has an even greater impact than other financial services. 

These Top Ten common words and phrases can provide you or your customers with the vocabulary needed to understand the basics of Credit Repair and allow both sides to communicate important information. 

If you’re looking to repair your credit, these terms will help you understand how our industry works. 

And If you have a Credit Repair Business, you can use this as inspiration to make your own educational materials. 

Here’s what’s important…

We’re not going to be discussing advanced terminology. There won’t be talk of Arrears, Cramdowns, Piggybacking, or Rebucketing - even I sometimes forget what Rebucketing means. 

This is all about learning the introductory language of Credit Repair. 

And that’s probably the best place to start…

CREDIT REPAIR is the process of identifying and deleting inaccurate, incomplete, and outdated information from credit reports.

Some businesses might call it Credit Mending, Credit Restoration, or Credit Rehabilitation, but it all means the same thing.

Now, let’s get into the Top Ten Credit Repair Terms that everyone needs to know…

CREDIT –​ Credit is deferred payment when making a purchase, based on a borrower promising to pay the full amount plus interest at a later date. 

CREDITOR –​ A creditor, also known as a lender, is an individual or entity to whom the borrower owes money.

CREDIT HISTORY –​ Credit history is a record of a borrower's ability to repay debts and demonstrate responsibility in repaying them. Credit histories are recorded in credit reports.

You can guess what’s up next.

CREDIT REPORT –​ A credit report is a detailed summary of a borrower’s credit history. Credit reporting agencies keep these reports on file and submit them to potential creditors on request, who use them to determine whether or not a borrower is creditworthy.

Credit reports include the number and types of credit accounts a borrower has used, how long each account has been open, the amounts owed, the amount of available credit used, whether bills are paid on time or not, and the number of recent credit inquiries.

CREDIT INQUIRY – An inquiry is a request for a copy of a borrower’s credit report to evaluate their creditworthiness. Inquiries take place during the submission of every credit application to determine whether a borrower should be extended credit. 

There are HARD inquires and SOFT inquiries. A HARD Inquiry is an inquiry where a creditor requests a copy of a borrower's credit report after they applied for credit or a loan. Hard inquiries are designed to evaluate a borrower’s risk level, and they do affect your score, especially if you have a lot of them.

A SOFT inquiry is an inquiry where a lender requests a copy of the borrower's credit report, but it has no effect on the borrower's credit rating.
Also, if you’re pulling your own credit, like with a credit monitoring service like Credit Hero Score, that does NOT affect your score at all.

CREDIT SCORE –​ A credit score is a statistic-based number that speaks to the borrower’s credit report and overall credit history. Credit scores convey how likely borrowers are to repay future debts. The credit scoring system helps determine whether a potential borrower should be extended credit. The most common credit scoring systems are FICO and Vantage, and the scores range from 300 to 850. A high score means the borrower has good credit, and a low score means the borrower has bad credit. 

Borrowers with bad credit tend to struggle to get approved for credit from traditional lenders, and if they do get approved, the down payments and interest rates tend to be very high. Bad credit can be the result of late payments, skipped payments, evictions or bankruptcies, or even identity theft. And they’re often the result of an error made by one of the Credit Bureaus because nearly 8 out of 10 credit reports contain errors. That’s why it’s important to check your credit reports often. 

CREDIT BUREAUS –​ Credit bureaus, also known as credit reporting agencies, are entities that keep borrowers’ credit reports on file and provide copies to card issuers, lenders, and hiring managers based on requests. 

The Fair Credit Reporting Act (FCRA) has a strict limit on who can check your credit and under what circumstances. The law ensures that only business entities with a specific, legitimate purpose, not members of the general public, can check your credit without written permission. 

The three main credit bureaus in the US are Equifax, Experian, and TransUnion. 

FURNISHER –​ A furnisher, also known as a data furnisher, is an entity that reports information about borrowers to consumer reporting agencies, which may include credit bureaus, tenant screening companies, check verification services, and medical information services. Furnishers are typically creditors, lenders, and collection agencies but may include other entities.

When engaged in Credit Repair, individuals or Credit Repair organizations dispute information provided by the Bureaus or the Furnishers.

DISPUTE –​ A dispute is a legal process for a person to question the validity of any information that appears on their credit reports. We’re given this right by law under the Fair Credit Reporting Act. 

The dispute process is all done by mail, and the borrower must identify specific inaccurate, incomplete, or outdated information and demand that it be deleted from their credit reports. These letters are called Dispute Letters. 

Also, I might add that the reason we do this by paper mail is because if you dispute online with the bureaus, you actually wave away your rights.  So ALWAYS dispute by mail, and you’ll have much better results. 

The act of sending in a dispute on your credit report does not hurt your score. The outcome of the dispute often causes your score to adjust, higher in most cases but sometimes lower depending on the circumstances, especially if you’re disputing and removing an old established account. 

The CFPB – The Consumer Financial Protection Bureau is the US government agency responsible for consumer protection in the financial sector. They make the rules. When disputing with the Bureaus or Furnishers, filing complaints with the CFPB is a common and effective Credit Repair tactic.

For a quick recap…

A borrower asks for CREDIT. 

A CREDITOR provides it.  

What the borrower does with that credit becomes their CREDIT HISTORY.

A detailed summary of that history is a CREDIT REPORT

An INQUIRY is when any entity asks to see that report.

A CREDIT SCORE is a grade given to that report with the intention of showing how likely it is that the borrower will repay future debts.

The CREDIT BUREAUS determine those scores based on information provided to them by the FURNISHERS

When the bureaus or the furnishers use inaccurate, incomplete, or outdated information, a borrower files a DISPUTE

And the CFPB makes sure everyone plays by the rules.  

Those are the Top Ten Credit Repair terms that everyone needs to know!

Again if you’re looking to repair your own credit, I hope you have a better understanding of how this process works. 

And if you have a Credit Repair Business, feel free to use this video as inspiration to make your own educational materials. 

When more people know these terms, that will mean less confusion and fewer people intimidated by the Credit Repair process. 

I’ll end by saying…

If you don’t already have a Credit Repair Cloud account, check it out. It’s the software that most Credit Repair businesses in America run on. Just sign up for a 30-Day Free Trial at CreditRepairCloud.com/freetrial

And If you’d like me to hold you by the hand as you launch your own credit repair business, check out our Credit Hero Challenge!

Challenge-Stack-Mockup-Final

It’s an amazing program where you’ll learn the processes that have made millionaires, and it costs less than you'll spend taking your family to McDonald’s for dinner.

We’ve got another challenge starting in a few days, so grab your spot right now at CreditHeroChallenge.com!

Until then, remember, keep the facts on your side…

And keep changing lives!

Be sure to subscribe on your favorite platform below!

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Topics: Podcast

Transcript

Daniel Rosen  0:00  
Hey credit heroes, do you speak the language of credit repair? All financial services have their own unique terminology. But believe it or not terminology can sometimes confuse and intimidate people and prevent them from seeking financial services. So today, I'm going to list the top 10 Credit Repair terms that everyone needs to know. So you better stick around. So the big question is this. How can we take our passion for helping people with their credit and turn it into a successful business without taking loans without spending a fortune by bootstrapping it from nothing? So we can help the most people and still become highly profitable? That is the question, and this podcast will give you the answer. My name is Daniel Rosen, and welcome to Credit Repair Business Secrets.

Unknown Speaker  0:53  
Okay, if this is your first time listening to my podcast, every week, I cover industry news, financial tips, and entrepreneurial advice for bootstrapping your business from nothing. This show is the best how to guide for business owners, and there's no other podcasts like it. So be sure to click that subscribe button now and get ready to start changing lives. Okay, so no matter what your age is, everyone feels confused and intimidated when they try to learn something new. And when it comes to financial services, confusion and intimidation can hold people back from achieving their dreams. That's why today in order to help people to understand what we do, and to ease any intimidation, I'm going to give an intro to the world of credit repair by listing the top 10 terms that everyone needs to know. Now before we get started. This podcast is brought to you by credit hero score Grennan euroscore is the only credit monitoring service that integrates directly with credit repair cloud get instant access to your credit reports and scores by signing up for a seven day trial for only $1 Sign up right now at credit heroes score.com.

Unknown Speaker  2:10  
Okay, let's get into this confusion and intimidation affect consumers financial decisions. A study by the Milken Institute determined that 43% of adults in the US are considered financially illiterate, and that is a huge percentage of the population. And a survey by one poll found that 41% of Americans are intimidated by their own finances, and who can blame them? We're not taught personal finance in school and financial fine print often reads like it was designed to be confusing. So how does this relate to us? Well, credit repair even though it's been around for decades, it's still a relatively new industry. So the problem of customers not knowing what we do, or what our words mean, has an even greater impact than other financial services. These top 10 common words and phrases can provide you or your customers with the vocabulary needed to understand the basics of credit repair and allow both sides to communicate important information. Now, if you're looking to repair your credit, these terms will help you to understand how our industry works. And if you have a credit repair business, you can use this as inspiration to make your own educational materials. Here's what's important. We are not going to be discussing advanced terminology. There won't be any talk of arrears, cram downs piggybacking re bucketing sometimes I even forget what re bucketing means. This is all about learning the introductory language of credit repair, and that's probably the best place to start. Credit Repair is the process of identifying and deleting inaccurate, incomplete and outdated information from credit reports. Some businesses might call it credit mending credit restoration or credit rehabilitation, but it all means the same thing. Now let's get into the top 10 Credit Repair terms that everyone needs to know. credit. Credit is deferred payment when making a purchase based on a borrower promising to pay the full amount plus interest at a later date. creditor a creditor also known as a lender is an individual or entity whom the borrower owes money credit history. Credit History is a record of a borrower's ability to repay debts and demonstrate responsibility in repaying them. credit histories are recorded in credit reports. So you can guess what's up next credit report. A credit report is a detailed summary of a borrower's credit history, credit reporting agencies keep these reports on

Unknown Speaker  5:00  
file and submit them to potential creditors on request, who use them to determine whether or not a borrower is credit worthy credit reports include the number and types of credit accounts a borrower has used, as well as how long each account has been open. The amounts owed the amount of available credit used, whether bills are paid on time or not. And the number of recent credit inquiries credit inquiry, an inquiry is a request for a copy of the borrower's credit report to evaluate their credit worthiness inquiries take place during the submission of every credit application to determine whether a borrower should be extended credit. There are hard inquiries and soft inquiries. A hard inquiry is an inquiry where the creditor requests a copy of the borrower's credit report after they applied for credit or alone. Hard inquiries are designed to evaluate a borrower's risk level and they do affect your score, especially if you have a lot of them. A soft inquiry is an inquiry where a lender requests a copy of the borrower's credit report, but it has no effect on the borrower's credit rating. Also, if you're pulling your own credit, like with a credit monitoring service, like credit hero score that does not affect your score at all credit score. A credit score is a statistics based number that speaks to the borrower's credit report and overall credit history credit scores convey how likely borrowers are to repay future debts. The credit scoring system helps determine whether a potential borrower should be extended credit. And the most common credit scoring systems are FICO and Vantage and the scores range from 300 to 850. A high credit score means the borrower has good credit and a low score means the borrower has bad credit. Borrowers with bad credit tend to struggle to get approved for credit from traditional lenders. And if they do get approved, the down payments and interest rates tend to be very high. Bad credit can be the result of late payments, skip payments, evictions or bankruptcies or even identity theft. And they're also often the result of an error made by one of the credit bureaus because nearly eight out of 10 credit reports contain errors. That's why it's very important to check your credit reports often credit bureaus, credit bureaus, also known as credit reporting agencies are entities that keep the borrower's credit reports on file and provide copies to card issuers, lenders, and hiring managers based on requests. The Fair Credit Reporting Act has a strict limit on who can check your credit and under what circumstances the law ensures that only business entities with a specific legitimate purpose not members of the general public can check your credit without written permission. The three main credit bureaus in the US are Equifax, Experian, and Transunion, furnisher, a furnisher, also known as a data furnisher is an entity that reports information about borrowers to credit reporting agencies, which may include credit bureaus, tenant screening companies, check verification services, and medical information services. furnishers are typically creditors, lenders and collection agencies, but they may include other entities when engaged in credit repair individuals or credit repair organisations dispute information provided by the Bureau's or the furnishers dispute. A dispute is the legal process for a person to question the validity of any information that appears on their credit reports. We are given this right by law under the Fair Credit Reporting Act. The dispute process is all done by mail. And the borrower must identify specific, inaccurate, incomplete or outdated information and demand that it be deleted from their credit reports. And these letters are called dispute letters. Also, I might add that the reason we do this by paper mail is because when you dispute online at the Bureau's, you're actually waving away your rights. So always dispute by mail, and you're going to have much better results the act of sending in a dispute on your credit report it does not hurt your score. However, the outcome of the dispute often causes your score to adjust higher in most cases, but sometimes lower depending on the circumstances, especially if you're disputing and removing an old established account, the CFPB the Consumer Financial Protection Bureau is the US government agency response

Unknown Speaker  10:00  
to both consumer protection in the financial sector, they make the rules when disputing with the Bureau's or furnishers. filing complaints with the CFPB is a common and effective credit repair tactic. Let's do a quick recap. A borrower asks for credit. A creditor provides it what the borrower does with that credit becomes their credit history. And a detailed summary of that history is a credit report. An inquiry is when any entity asked to see that report. A credit score is a grade given to that report with the intention of showing how likely it is that the borrower will repay future debts. The credit bureaus determine those scores based on information provided to them by the furnishers when the Bureau's or the furnishers use inaccurate, incomplete or outdated information, a borrower files a dispute, and the CFPB makes sure that everyone plays by the rules. And those are the top 10 Credit Repair terms that everyone needs to know. Again, if you're looking to repair your own credit, I hope you have a better understanding of how the process works. And if you have a credit repair business, feel free to use this video as inspiration to make your own educational materials when more people know these terms that will mean less confusion and fewer people intimidated by the credit repair process. And just a reminder, this podcast is brought to you by credit hero score. Credit hero score is the only credit monitoring service that integrates directly with credit repair cloud get instant access to your credit reports and scores by signing up for a seven day trial for only $1 Sign up right now at credit hero score.com.

Unknown Speaker  11:48  
And now for my favourite part of the episode. Each week I feature one of our credit heroes inside our credit repair cloud Facebook community. So you can see firsthand what real people are doing as they launch and grow their business. And today's spotlight is on Richard See, Richard recently took our credit hero challenge. And a few days ago he posted a message saying hey guys, I thought I would share my social media posts with you that I just had made. Please feel free to take them and make them your own with your own branded colours. I hope you like them. And Richard attach 15 template designs for social media posts for everyone in the community to us. Isn't that amazing? Thank you, Richard, you already understand what it means to be a credit hero. Please keep us updated on your progress. Remember, good things happen to good people who work hard. And I'll end by saying if you don't already have a credit repair Cloud account, check it out. It's the software that most credit repair businesses in America run on. Just sign up for a 30 day free trial at credit repair cloud.com/free trial. And if you'd like me to hold you by the hand as you launch your very own credit repair business, check out our credit hero challenge. It's a live experience that has helped tonnes of credit heroes to get their first clients get certified and disputing and gain confidence as they launch their credit repair business on a solid foundation. So they can change a whole lot of lives and make a great living in the process. We're starting again very soon. So you want to join before the doors close, or you're going to have a long wait until the next one. So sign up now at credit hero challenge.com. And if you're finding value in the things that I share on this podcast, be sure to click to subscribe and leave me your questions in your comments down below because I read each and every one of them. Be sure to visit my blog if you'd like to read the show notes. And if you have a question that you'd like me to answer, drop it in the comment section, and I'll be sure to answer it during the later episode. And remember, the more people who understand the language of credit repair, the more lives will be changed. Keep changing lives. One a fast track to creating an amazing business that helps people changes lives and makes you a great living in the process that I'd like to invite you to my free online training at creditrepaircloud.com/free Training. In this free training, you will learn how to get clients willing to pay you even if you're just starting out how to get easy credit repair results without being an expert, and how to get all the clients you'll ever need without paying for advertising. Again, this training is absolutely free. Just visit credit repair cloud.com/freetraining
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