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"How Credit REALLY Works" by Dave Peters
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What's in it for you?
Credit Scores & Credit Reports
• What credit scores and reports are
• How they affect your interest rates
• How scores are created
• Very common lies about credit scores
• Negative items, full list & meanings
• How to raise your scores easily
• Types of accounts that will lower scores
• Lies common to 70% of credit reports
• What even loan officers don’t know
• Debt-to-income ratio, the hoax & the truth
• How credit bureaus really work
Result: A greater understanding of credit, credit scores and credit reports than 98% of all loan officers. Ability to improve your scores.
Bad Credit
• How to handle old collections & judgments
• Negotiating 75% off collections
• What bankruptcy lawyers won’t tell you
Result: Knows how to handle bad credit |
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“I read your book from cover to cover. I made many of the mistakes you warn about. I’m going to make sure my children read this so they don’t have the financial and credit problems I’ve had.”
Several readers have made comments very close to this one
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Dave Peters’ Personalized Credit Score Improvement Consultation |
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Loans, Auto, Home, Other
• Hidden interest rates and fees
• Loans that are good for credit
• Loans that are bad for credit
• Various ways lenders can cheat you
• Mortgage pre-payment penalties
• Negotiating interest rates
• Negotiating for the best price on vehicles
• Negotiating for free extended warranties
• How to save tens of thousands on your loans
• Why closing old accounts can harm credit
• Getting the best deals on loans and credit cards
Result: Know how to save thousands on credit card debt and tens of thousands on home and vehicle purchases and loans
Debt Management
• Why Credit Counseling destroys credit
• How to pick a consolidation or counseling firm
• Debt settlement, how to pick a company
Result: Knows what to do when in financial trouble |
Other
• Why your 5% or 6% mortgage costs you over 70% interest rate, what to do
• Real estate and wealth rules
• The two things most self-made millionaires have in common and how to do them even if you aren’t smart
Sample of Book
This sample of the book is presented backwards, aside from the Introduction. This way, you can quickly learn more about the book's extremely wide range of incredibly important information that you will need to manage your credit and wealth in today's world. Horrid lies have been piled upon us over the past 30 years by those who will gain the most from our belief in their lies.
This book explodes the false data you have received regarding your credit, your loans and your personal finances. 93-97% of you reading this will retire from work into poverty*. Why? Because you have believed the wrong things about how credit and finances work. I hope you purchase this book so that your wealth and happy, early retirement can be assured.
My best to you and your loved ones,
Dave Peters
*Home ownership and typical retirement funds plus social security are not nearly enough. These will create poverty retirement incomes for most people. If you don't believe me, do these two things: 1.) Ask whoever handles your retirement fund how much you will get each month when you retire. If you retire 20-25 years from now, that money will buy half of what it does now because of inflation. 2.) Call your local social security office and ask them how much you'll get each month.
Now ask yourself these questions: A.) How well will I live on that income that becomes worth less each year because of inflation? B.) If I sell my home, where will I live and how much will it cost me? C.) Can I really count on social security being there for me? D.) What happens if my company blows up like Enron?
Introduction Sample
Introduction Summary:
The blunt and shocking truth concerning how little you really know about how credit reports actually work, how lenders cheat you of your hard earned money and why you’ll retire much poorer unless you read and understand this book.
Quote:
"90% of what you think you know about how credit works is false.”
“60-85% of what you think you know about how loans and lending works is false or mostly false.”
“This book will give you the truth about how credit really works.
You’ll learn a great deal about how your loans affect your wealth.”
“In these pages you will learn things that will shock you. You will see
things that I don’t believe have ever been written anywhere before.”
You Get Poorer While the Creditors Make $100’s of Billions
Chapter Summary:
The info in this chapter is worth tens or hundreds of thousands of dollars to you. It is not a matter of your intelligence or knowledge. There simply are too many lies about money, credit and lending that you have accepted as true. Read this chapter twice. Think of it this way: You are making perhaps $100,000 an hour by reading the material and taking the time to understand and apply it.
Quotes:
“The largest holes you have in your financial management are home purchases and loans, vehicle purchases and loans, and credit card use.”
“The national average for credit card interest rates is 18%. The last time I checked those same banks were paying out about 1% interest on a standard, normal savings account. Then they lend some of that money out to credit card users at 9.9% to 29.99% interest rates. Outrageous?? Greedy? I’ll tell ya, you ain’t heard nothin’ yet!
“Let me tell you about the 91% interest rate loans at least half (50%) of you have right now and you don’t even know it. Yes, over half of you have chased interest rates down below 5% on home mortgages and you don’t even realize how badly you are being bled dry of your hard-earned money and future wealth. And if I am right and a low 5% interest rate is sucking money out of you like Dracula drinks warm blood from his victims, just imagine what credit card debt is doing to you.”
“Economy is (according to Webster’s New World Dictionary) careful management of wealth.
“Finance is (according to Webster’s) the managing or science of managing money matters.
“Since you and your family are likely to make $1.5 to $4 million dollars in your lifetime, don’t you think it is worthwhile to learn the science of money management?”
Creating the Ideal Credit File, A+ & A++ Credit Scores
Chapter Summary:
Eye opening and stunning, this chapter explains exactly how to create much higher credit scores. Many other books provide tricks to create temporarily higher scores. If you follow the advice here, you will create permanent results and you’ll be able to achieve the top 1% or 2% of credit scores in the country.
Also included in the chapter are excellent pieces of advice anyone can use to greatly improve their wealth and retire much younger. Reading and following the advice given is worth $1000 a minute of your time.
Quotes:
“Very early in this book I explained that the FICo credit scoring software compares your credit behavior and borrower characteristics to some unknown “ideal borrower”. A great deal is known about what it might take to have the highest credit score possible.
“I will teach you those types of borrower behaviors and account types and other things that will create an extremely high score for you. If you have an excellent score now, you can learn how to avoid things that will lower it. If you want to improve your score, I’ll teach you what your credit file should look like ideally.”
“If you are carrying heavy credit card debt, pay down toward zero as fast as you can by following these rules:
“1. Any accounts that have a balance above 75% of your credit limit are probably your first target. Paying these below 75% of your credit limit first will do the most to improve your credit score. But doing this may not be the best financial advice I could give. The best financial advice would be to pay off the highest interest rate card to zero first.”
“To achieve the best DTI FICo score, follow the following rules:”
“6. After your cards are paid to zero, use each of you credit cards for purchases at least four times per year and pay them off every month."
Buy, read and use How Credit REALLY Works,
And you won’t end up like this:
Several weeks ago a retired military officer and his disabled wife called me for help with their debt. He was 73 years old, she much younger and they had $73,000 in credit card and personal loan debt. The gentleman had to keep working to try and keep up with his bills. He made a funny statement to me, he said, "No one ever taught me how to handle my money."
The statement was very sad, not funny at all. It is because of this couple that I decided to greatly expand this book into what it is now. Please, don’t end up like them.
Warning, Warning, Danger Will Robinson! Negotiating on Debt and Credit
Chapter Summary:
Some of the best advice you will ever find about handling your large purchases is in this chapter. You’ll learn how to negotiate down your debt, how to negotiate for better credit, how to get the best price on auto and home purchases and more.
Don’t ever pay an old collection or judgment without carefully following the advice given in this chapter. Unless you understand the “Seven Year Rule” and follow certain steps, your credit will become worse than ever.
Quotes:
“In order to get the new loan you decide to follow the demands of the lender and the loan officer, you pay out many hundreds or thousands of dollars toward these old collections and the judgment and all three scores drop by 130 to 160 points. You had “A” credit before paying out the thousands and “D minus” credit afterwards. Now the lender refuses to give you the loan and nobody else will lend to you either as you now have credit scores of 450, 513 and 449. Why, WHY?!?!”
“To have a fairly good chance of avoiding this common problem, I am pulling material from my next book and giving it to you here. This is your first and only taste of the miracles of credit handling to be found in my upcoming book.”
“On collection accounts (and some judgments), it should be no great trick to negotiate 50% off of what you are being asked for.”
“Shhhh, quiet. Maybe your offer will be accepted. A professional negotiator can get a deal this good sometimes.” (75% off the amount due)
Credit Report: “Heal Thyself”
Chapter Summary:
Why credit is never really “ruined”. Learn how and why a credit report repairs itself and also learn how to speed up that healing.
Quotes:
“Think of credit as a long tall set of stairs. Man, it is really a long set of stairs. Nobody ever gets all the way to the top. Almost no one ever gets all the way to the bottom of the stairs.”
“The question is, ‘How deeply is the credit damaged and for how long of a period of time?’”
Debt Management Services
Chapter Summary:
A complete discussion of how the debt management services work. They are:
1. CCC = Consumer Credit Counseling = Consolidation
2. Debt Settlement = Debt Negotiations
3. Debt Verification = challenging the legality of debts
The Author is extremely familiar with each of these services. The good and the bad about each service is discussed. You also learn how to select a company of any type so that you are not cheated or lied to.
Getting flushed down the debt drain: The most common and usual mistakes people make when trying to get out of debt. Don’t flush yourself down the drain—follow the advice in this chapter.
Quotes:
“No matter how confusing it may seem, there are only two types of established Debt Management Services to help a person get out of debt more quickly than they might without help. There is a third type of service out there.”
“Consumer Credit Counseling/Consolidation is usually more negative on credit than Debt Settlement. CCC companies lie about this all the time. CCC takes longer to get out of debt and costs much more out of your pocket than Debt Settlement.”
“If you decide that CCC is for you, I have some very definite advice for you. First, CCC’s job is to send a new payment and interest rate plan to your creditors. Depending on which company you call, and which creditors you have, you may not receive any help at all. You may end up in worse trouble than when you started. Now here is how to select a CCC.”
Buy, read and use How Credit REALLY Works,
And you won’t end up like this:
Another couple who called me for help was a pretty average family. Average house, cars, average jobs and income. They were behaving like any average family, and when his company closed after 25 years of working there he had to take a job with 40% less pay. This is a very common call I get. Suddenly his car and house payments seemed huge to him, like boat anchors pulling him under, so he did another average thing: He started to live on his credit cards…until he couldn’t even handle the minimum payments. How secure is your job?
Why Closing Old Open Accounts Can Harm Your Score, or Raise It (Debt and Destruction)
Chapter Summary:
The horrible cycle of debt many people find themselves in is covered here. The Creditors have laid terrible traps for you and you were too happily spending to notice the teeth of these traps—buying is so much fun.
More advanced material of credit reporting and lending is taught. You begin to learn to think like a credit expert. You begin to learn how to keep more of the millions of dollars you will earn in your lifetime. And of course, the material suggested by the chapter title is explained.
Quotes:
“First, let’s go over part of why a score might go up when unused accounts are closed.”
“Another reason a FICo score could drop as a result of the closing of unused accounts can be found in the concept of debt-to-income ratio.”
“The creditors would notice their debt-to-income ratios were high and (even if they weren’t late on a payment) their interest rates would rise dramatically. The creditors considered them bad risks! They would try the balance-transfer game for better rates. Wow is that a trap; a game with a time limit. These poor souls usually wind up with the maximum legal interest rates.
Credit Damage, Types: Truth, Lies and Electronic Tape
Chapter Summary:
Everything you could possibly do to harm your credit is listed and fully explained here. More helpful, useful, credit-saving advice is packed into this chapter alone than most books.
This chapter is full of uncommon useful advice and comments on the subjects of:
Credit
Credit Reports
Bankruptcy & what lawyers don’t tell you & how to select a lawyer
Mortgage pre-payment penalties
and much, much more
Quotes:
“There is a very short list of things that you can do to damage your credit. There is a longer list of things Creditors report about your behavior to the Bureaus. We will cover both of those lists.”
“You need to remember that just because a negative item stays on your credit report for 7 or 10 years that your credit is NOT “ruined” for that long.”
“They had two (2) bankruptcies on their credit report and still had “A” credit scores around 660! How? Why?”
“Read and reread this book. I am a credit expert. If you totally understand everything I have written in these pages, you are an expert too.”
“Bankruptcy lawyers won’t tell you about all of the negative things that happen after bankruptcy. I will.”
“I have seen certain sub-prime mortgage lenders actually deposit checks late intentionally. They do this so that you have zero chance of refinancing out of your high interest rate loan. Your best protection is….
FICo Scoring Mysteries of the World
Chapter Summary:
The three remaining mostly true parts of how a credit score is built are discussed. The Author's experiments with credit scoring and credit reporting prove that much of what you have learned, much of the info on the internet and in other books is quite false. Learn the truth here.
Quote:
“Why did a credit score go up just because I reported that a particular borrower is a Vice President? It must be important. The fact that someone is a Vice President does not change their income. It does not change their Debt-to-Income Ratio.”
“The Bureaus say that several credit report requests within a 14 day period drawn by the same type of lender (auto, home) only count as one drop of score. I have found this to be UNtrue.”
“Any balance on a revolving account above 30% of the credit limit is negative. More about this in the chapter called ‘Creating the Ideal Credit File, A+ & A++ Credit Scores’.”
Buy, read and use How Credit REALLY Works,
And you won’t end up like this:
A 75 year-old woman called. Her husband had died years earlier and both his pension and his social security stopped coming in to her. Originally debt-free, she began living on credit cards, especially her food and expensive prescriptions. House and auto repairs went on the cards. She took cash advances from cards to pay the cards. $80,000 in debt and with a paid-for house worth $190,000 bankruptcy was not an option.
Will you be able to live on one social security check when you are old enough?
Debt-to-Income Ratio, Credit bureaus—Blind as bats?
Chapter Summary:
Whatever you learned before about Debt-to-Income Ratio (DTI), get it out of your mind. You have been brain washed. This chapter will start to replace the lies with truth.
Quote:
“The funny thing about DTI is this: What do the Bureaus actually know about your income? I wish I could tell you. Maybe you told them. Maybe you filled out something on an application or on the internet and that’s how they know. Maybe they don’t know, and they are only guessing.
“You know what I think? I think they don’t know what your income truly is but that they are only guessing. What’s my reasoning? My credit reports show that I still work for a company that I stopped working for over twenty years ago! My goodness, if their information is that bad and that old, who knows what they know? Who knows how true it is?”
Payment History, Stuff you never knew
Chapter Summary:
This chapter continues to teach you the real mysteries of how credit reporting and scores truly works. There is more material here that no other credit “expert” knows or can teach you.
Quotes:
“The credit card companies supposedly make about 30% of their profits from over-limit fees and late-payment fees.”
“The Payment History (part of your credit score)is broken up into three major parts. They are: …”
“I have listed these in the order in which they affect your score.”
“Only when lateness is reported to the Bureaus can it harm your credit score. Remember, it is NOT when your payment arrives at the Creditor that matters. What matters is WHEN your payment is processed into the computer as having been paid.”
The Credit Circle, Some Call it The Circle of Life
Chapter Summary:
This chapter covers more basics that other credit “experts” teach and explains which parts are true and which parts are not true. The actual secrets of how credit really works are partially revealed in this chapter.
Quotes:
“A fact on your report will cause different scoring effects for you than the same fact on someone else’s report.”
“I have borrowed the data on The Credit Circle from the Fair Isaac & Company web site. You can find this circle throughout the internet.
In my opinion, The Credit Circle is false and misleading. However the comments I have made are true.”
“FICo” Isn’t a Dog’s Name
Chapter Summary:
Who and what “FICo” really is compared to Beacon, Empirica and other names for scores is discussed along with how truly complex credit scoring actually is and why. You’ll learn the basics of “credit grading” systems and what that means to the rates and loans you get.
Quotes:
“By computer, you are compared by your credit behavior against millions of other credit users ....”
“That is thirteen billion calculations to come up with one FICo score. … the FICo software does many more calculations than that!”
The 3 Credit Bureaus
Chapter Summary:
Direct and to the point, this chapter deals with certain basics that must be understood to get anything out of the rest of the book. In it you’ll also learn why credit scores are different from bureau to bureau, who has their greedy hands in your pocket, how the credit bureaus earn much of their money and why that is bad for you, and more.
Quotes:
“The basic reason Creditors pay to report your credit behavior is simple: By paying to report their borrowers’ credit behavior now they can make better lending and credit decisions on anyone else later.”
“The car dealer is not actually lending you the money. A bank, the auto manufacturer, or some other Creditor provides the actual cash for your auto purchase or lease. And oh, yes! The auto dealer makes a great deal of money by being the “money broker” for the loan.”
Buy, read and use How Credit REALLY Works,
and you or a loved one won’t end up like this:
A married 24 year-old student called. He had over $40,000 in credit card debt and his wife had about $23,000. They both worked full time, and one small auto repair pushed them off the cliff. They were falling behind. Over-limit fees were $150 a month. Late payment fees were $200 a month. Was their only option bankruptcy? (No, I was able to help.) Did you know they pass out credit cards like candy at colleges? Will you, your child or grandchild take the candy?
Table of Contents
Introduction, wanna make a $100,000?
The 3 Credit Bureaus and Definitions, read it or sleep
“FICo” Isn’t a Dog’s Name
The Credit Circle, some call it The Circle of Life
Payment History, Stuff You Never Knew
Nasty Creditor Tricks
Debt-to-Income Ratio, Credit Bureaus—Blind as bats?
Lies Found in Your Credit Report
Never Before Written Truths About Credit
FICo Score Mysteries of the World
More Lies and Myths Exploded
More Never Before Written Truths About Credit
Credit Damage Types: Truths, Lies and Electronic tape
Warning – Bad Credit Bureau Advice
What Bankruptcy Lawyers Don’t Talk About
Why closing old open accounts can harm your score—or raise it (Debt and Destruction)
More Nasty Creditor Tricks
Debt Management Services
A Breath of Fresh Truth
How to Select a Company
Credit Report, “Heal Thyself”
Warning, warning…Danger Will Robinson!
Negotiating the Best Vehicle and Home Prices
Negotiating for Improved Credit Scores
Negotiating Old Debt Amounts Lower
Creating the Ideal Credit File, A+ & A++ Credit Scores
A+ Credit Score – Payment History
A+ Credit Score – Debt-to-Income Ratio, Rules
Avoiding Retiring Poor – Vital Advice
A+ Credit Score – Length of Credit History
A+ Credit Score – Types of Credit Accounts In Use
The Ideal Debt File
A+ Credit Score – Requests For New Credit
You Get Poorer, The Creditors Make $10’s of Billions
Why 93-97% of Americans Are Retiring In Poverty
Avoiding Retirement Poverty
Lower Interest Rate Loans, How They Cheat You
Real Estate and Other Wealth Rules
The Two Things Most Millionaires Have in Common
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