Greg Vogel, Credit Repair Expert

You can't turn on the television, watch a sporting event, or surf the Internet without being hit up with advertisements trying to convince you to buy some sort of credit or identity theft protection related product. Freecreditreport.com, Lifelock, FreeScore.com, and Privacy Matters (aka FreeTripleScore.com) dominate the airwaves, web and overall marketing of these services. The problem with all of these services is that you can do much of what's being advertised for free or the marketing is misleading.

Take for example FreeScore.com. This is the service being plugged by Ben Stein from Ferris Bueller's Day Off fame. The problem is the advertising of their service pushes the bounds when it comes to truth in marketing. According to Stein if you ""wanna get a new job, you're at the mercy of your credit score." Of course this is not true as employers don't have access to your credit scores as part of their employment screening processes. They do have access to your credit reports though.

Additionally Stein states that the service "gives me unlimited access to the 3 major credit reports and scores." Now, I'm pretty sure anyone in the credit industry would recognize the FICO® score as being the "major" credit score used by the lending world. In fact, according to the FICO website 90% of the largest banks use your FICO score to make credit decisions. The score being sold by FreeScore.com (yes, you are signing up for a subscription service when you get your score so I don't call it free) is likely your TransRisk Score or VantageScore. Neither of those scores are can be called your "major credit score."

Next is LifeLock. This is the service hocked by Todd Davis, the company's CEO, as he supposedly drives around the streets with his Social Security Number printed on the side of a truck. I wasn't there and I didn't see the truck so I'm calling bologna on that gimmick. LifeLock isn't a credit monitoring service but they do market themselves as the "#1 Identity Theft Protection" service.

A description of how their service works is on their website. So, here's a breakdown of some of what you get for $10 per month, and how you can get it for free.

- Monitoring of unregulated Internet and file sharing networks for your identity information. A free alternative would be setting up Google alerts with your name and address. You can do this here for free... http://www.google.com/alerts

- Sex offender records for your zip code. A free alternative can be found via a variety of websites. Google the term "sex offender registry" and be sure to add your city or state name at the end. For example, here's Illinois' list. http://www.isp.state.il.us/sor/sor.cfm

- Free annual credit reports. You can do this for free here... https://www.annualcreditreport.com/cra/index.jsp. In all fairness to LifeLock, they do say you can do this on your own for free.

- Reduction in preapproved credit offers. On one of their television commercials they state, "You'll see a huge reduction in junk mail and preapproved offers." You can do this for free here... https://www.optoutprescreen.com/?rf=t

- $1 million dollar service guarantee. On one of their television commercials they state, "If anything happens while you're a client of LifeLock we will cover all losses and all expenses up to one million dollars." But on their website they state they will NOT cover "lost wages or business profits, loss of business or lost opportunities and direct out-of-pocket expenses like postage stamps, gas or mileage to go to local authorities, or any notary public fees, etc. And they will not cover "any direct losses as a result of the theft." That hardly sounds like ALL losses and ALL expenses. And the "etc" in the list of things they don't cover leaves the door open for the list to be much larger.

Next is FreeCreditReport.com, which is owned by Experian. And, twice the Federal Trade Commission has sued them because of their marketing. The credit report being given away isn't really free; it's free only if you sign up for a trial period to a credit monitoring service. And if you don't cancel the service during the trial period then you are billed on a monthly basis for the credit monitoring subscription.

In fact, on April 1, 2010 a new law goes into affect that will clean up how they market their conditionally free credit report. They, and any other service that uses a free credit report as a loss leader, must state the following...

THIS NOTICE IS REQUIRED BY LAW. Read more at FTC.GOV.

You have the right to a free credit report from AnnualCreditReport.com or 877-322-8228, the ONLY authorized source under federal law.

And finally we end with FreeTripleScore.com also known as Privacy Matters 1-2-3. As with FreeScore.com the data being provided is coming from TransUnion, which means the scores being "given" away are either your TransRisk or VantageScore scores. And, despite their efforts to not disclose their ownership, it appears that the same company is behind FreeTripleScore and FreeScore. Nice try guys.

The new law requiring the more overt disclosure about free credit reports will help to clean up what many believe is a marketplace filled with out of control and deceptive marketing practices. And remember, before you choose to spend the money on any of the credit related products and services listed you should at the very least research free options.

For consumers, 2009 will always be known as the year of the ‘credit crunch'. One of the biggest things consumers will remember is how poorly their credit card companies treated them. Almost everyone received letters in the mail about their credit limits decreasing, interest rates rising, and the like. Of course, this abusive behavior led to the passage of the Credit Card Responsibility, Accountability and Disclosure Act of 2009, or CARD Act for short.

Here's a brief summary of what this Act does for cardholders, among others...

•· Credit card companies cannot increase interest rates on existing credit card balances unless a customer is at least 60 days late.

•· A guaranteed 21 day grace period on payments.

•· 45 days advance notice of any interest rate increases.

•· Tough rules around issuing credit cards to consumers who are under 21 years old.

•· In the event of an interest rate increase, the credit card company must revert to the original rate after the customer makes six months of on-time payments. Clearer disclosure of account terms before an account is opened.

•· Restrictions on over limit fees. If a consumer has not "opted in" to allow a credit card issuer to approve a transaction that puts you in an over limit positions, they have to either decline the transaction or not charge you the over limit fee.

•· No additional fees because of the method of payment.

•· Billing statements must be mailed 21 days prior to the due date, and companies cannot charge a late fee if a payment is late due to a delay in processing. Applications of payments above the minimum now have to be applied to the balance with the highest interest rate.

•· A credit card company cannot raise interest rates in the first year of a customer relationship, and promotional interest rates must last at least six months.

So what should I do in 2010 in order to position myself in the best place? You can find yourself almost completely exempt from the credit crunch by doing two things:

1. Getting out of credit card debt, and

2. Increasing your credit scores.

By getting yourself out of credit card debt it allows you to escape the abusive treatment by lenders. Remember, things like interest rate and minimum payment increases only matter if you carry a balance. Getting out of and staying out of credit card debt puts you in a very enviable position.

A second byproduct of getting out of credit card debt is the significant benefit to your credit scores. "Debt" makes up a whopping 30% of the points in your FICO® scores, which places it a close second behind whether or not you have negative information on your credit reports. And as many people have learned the hard way, the minimum score requirements to not only qualify but also qualify at the best interest rates have become more difficult to satisfy.

This means higher FICO scores equals approvals where in the past a higher FICO score meant an approval with the best rates.

On November 29^th, Liz Weston from MSN published the following article on how FICO Score Damage Points are calculated:

http://articles.moneycentral.msn.com/Banking/YourCreditRating/weston-5-ways-to-kill-your-credit-scores.aspx?page=1

Essentially what happened was FICO simulated the impact of a variety of credit behaviors on FICO scores of both 680 and 780. This is layed out in the below chart:

Unfortunately, this information is not entirely correct. It holds true for some cases, but it leaves out some very important points. What FICO did not disclose and the article does not convey is that four of the five actions listed above will cause your credit file to be scored in a new scorecard!

FICO scores measure your credit file's potential risk by scoring it using a unique algorithm specifically designed for your file type, called a scorecard. That means if you have a bankruptcy then you're scored in a bankruptcy scorecard. If your credit file only has one or two accounts then it's scored in what's referred to as a thin file scorecard, and so forth and so on.

Point being, all of our credit files are not scored the same way AND not all are scored using the same FICO formula. Four of the five actions above are negative. And, when a clean file suddenly is hit with something negative it will go from essentially a "clean credit file" scorecard to a "derogatory file" scorecard. The result is a completely different measurement for EVERYTHING on your file. So adding a foreclosure or a settlement or a 30-day late payment or a bankruptcy to your credit file doesn't "cost" it the points you see above. It causes everything on your file to have a new value so the score change can't be attributed just to the negative item. The score change has to be attributed to the change in scorecards.

Point differences for the exact same action on the exact same FICO score can be anything but exactly the same. John Ulzheimer, one of the creators of the FICO score, re-interviewed FICO's Public Affairs Director, Craig Watts. He was able to confirm from Watts that the examples in the FICO chart were "hypothetical" and "could vary significantly" from consumer to consumer. You can Ulzheimer's his full article here.

http://www.credit.com/news/experts/2009-11-29/real-fico-score-damage-point-amounts-clarified.html

In summary, not all credit scores and scorecards are created equally! Be careful what you read out there!

...Last week we talked about 4 of 7 strategies to help raise your credit scores with the credit cards tightening their grips every day. Here are three more strategies to keep your FICO scores high and minimize the abuse from creditors!

5. Go Small and Go Local - As consumers, we tend to focus on the largest 5-10 banks and tend to forget about the thousands of lenders who are NOT treating their customers poorly. Credit unions are a great example of these lenders. If you are sick of how you're being treated by your Manhattan bank then perhaps you need a local credit union or local bank on your side.

6. Don't Exit The System - The country if on fire with angry consumers who are claiming to have sworn off credit for the foreseeable future because of how they are being treated by their lenders. "From now on if I can't pay cash for it I won't buy it." Eh, that plays well on the big screen but it's not realistic. Carrying around cash to pay for things is a bad idea. And good luck using debit cards for things like business travel and European vacations. Stay in the system, please.

7. If All Else Fails, Litigate - If you're finding yourself saddled with a garbage credit report because of errors and you can't get the credit bureaus or lenders to correct your files then think about filing a lawsuit. You certainly wouldn't be alone. There will be over 8,500 credit related lawsuits filed this year. Collections agencies are the targets in most of them but certainly the credit bureaus and lenders are in the cross hairs a fair amount too. Just be sure to hire a lawyer who knows what he's doing.

So there you have it, seven solid strategies to hopefully minimize your chances of being treated poorly by your creditors. And while there are certainly no guarantees that you'll exit this credit environment without a few scars, you can certainly make yourself as immune as possible by doing a few easy and inexpensive things. Good luck!

We're officially four months away from the Credit Card Holder's Bill of Rights going into effect. And, if certain Democrats have their way, we're only thirty days away.

The mainstream card issuers have a shrinking window of time to remold their cardholder base to their liking. This means consumers will continue to suffer the at the hands of their credit card companies, unless they employ one or more of the following strategies.

1. Don't Not Use Your Card - Ok, the poor grammar was intentional and corny but I think I've made my point. Credit card issuers are in business to make money and make a profit. They can't do either unless you are using your credit card. And, the best news is that you do not have to carry a balance from one month to the next in order to drop a few dimes in your credit card issuers' pockets. Each time you use your credit card the merchant (aka the place you used the card) has to pay the bank a fee. This fee is called interchange. It technically comes out of your pocket because many retailers will build the assumed fee into the price of the merchandise but it sure doesn't feel that way when we buy stuff with our credit cards.

2. Shut Up! - In the past a viable strategy to get fees waived and interest rates lowered was to call your credit card issuer and complain or otherwise plead your case. That's still a decent strategy but beware. Your credit card issuer might turn the tables and start asking YOU questions in order to determine whether or not they still want to do business with you. If you call them and THEY start asking questions about your job status and salary then hang up or you might just end up with a closed credit card.

3. Open Another Card, NOW - One of the worst strategies I see people employing today is the 1-card strategy. This is a consumer who has swallowed the Dave Ramsey gospel hook, line and sinker. The problem is that it's unrealistic and appealing only to the lowest common credit denominator. You should have MORE cards, not fewer cards. Clearly this is a credit score play as well since having more available and unused credit limits are always good for your credit scores. So, if you have one or two credit cards right now, think about opening at least one more. This gives you options in case one of your credit card issuers starts behaving badly towards you. Nothing is more empowering than saying "I'll take my business elsewhere" and then actually doing it.

4. Don't Hide Behind Great FICO Scores - FICO published a study earlier this year and the findings showed that the median FICO score for a consumer who has seen his or her credit limit reduced was 770. A 770 FICO score is fantastic in any lender's book and especially in this credit environment where lenders are gravitating to stronger borrowers. What this means is that just because you have great FICO's it doesn't fully shield you from adverse treatment from lenders.

Stay tuned for Strategies 5 through 7.