Category: CREDIT BLOG

Dear Mom,
When I think back to my childhood, one memory in particular still makes my eyes well up with tears…
While other parents were driving Mercedes and BMW’s, you were driving the school bus. And you did it with a smile on your face!
And work ethic isn’t the only thing you gave me. You are the definition of “Super Mom.” You have taught me that…
1) My word is my wand.
In fact, I can still hear your voice: “Phil, your word is your wand.”
If I was angry and complaining, you taught me that I would attract whatever I was focusing on. If I continued to use words of frustration, I would attract more frustrating things in my life. But if I used words of gratefulness, I would be given other things for which I would be grateful.
And guess what? My word is my wand, and that is why my life is so great right now.
Thank you, Mom.

2) I should always make it fun.

It was late into my elementary school years when I learned that “Energy Balls” were actually pitted prunes and that “Moon Candy” was dried apricots.
I specifically remember a day when I had a friend over, and you said, “Who wants some Energy Balls?”  Lacey and I jumped up and down…
I can only imagine what my friend was thinking, but I still grin when I think about the sick look of disappointment on his face when you brought out the “treat.” After recovering from his shock, he said, “Those aren’t Energy Balls. Those are PRUNES!”
Well, to this day, I still love my Energy Balls… and countless other kind-of-gross things that you made fun.
3) It will come back tenfold.

Perhaps your greatest lesson was this: “Everything you give will come back 10 times, so just keep giving.”
I remember the time you donated enough money to sponsor a pew at church. Money was tight, so I asked, “Why are we giving that much money when we can’t buy what we need for our own household?”
You said, “Whatever we give will come back ten times. Let’s keep giving and believing!” And you were right, Mom. It always came back ten times… and more.

Happy Mothers Day to all Moms!
Those “free credit score” jingles are like nails on a chalkboard to me. See—they are almost all scams.
Here’s how they work:
First, what they really offer is a free credit report. Then they try to sell you your credit score.
And here’s the problem: the credit score they try to sell you is total junk.
It’s called a “Consumer score,” and it’s not the same score that a lender, credit card company, employer, or landlord would see when they pulled your credit score.
Almost all lenders and banks use something called a FICO score. In fact, in my 20+ years in the real estate, mortgage, and credit industries, I have never once known a lender to use anything other than a FICO score.
Here’s the part that is even worse: FICO scores are almost always lower than Consumer scores. I tested this a few years ago on my own credit score. My FICO score was a whopping 237 points lower than my consumer score. I asked some friends to test it as well: Michael’s FICO score was 79 points lower than his consumer score, and Jocelyn’s was 54 points lower.
In all three circumstances, the Consumer score was higher.
Yesterday, I decided to see if things had changed. This time, my FICO score was 70 points lower than my Consumer score.
So the gap was a little narrower, but still wide enough to cause a big problem.
You see, if I relied on my Consumer score, I would have an artificial sense of security because it is always higher than my FICO score.
This can cause a big problem. Prospective homeowners do a little research, realize that lenders provide the best interest rates to people with FICO scores of at least 720, then they buy their credit scores from a free credit report website.
They don’t realize that the credit score they are buying is not a FICO score. And when their Consumer credit score comes in at 745 or 815, they think they are out of the woods. Instead of taking the steps necessary to build their credit scores, they sit back and relax.
But when it comes time to buy a house, their loan applications are either denied due to low credit, or they end up paying more interest than they expected. In Jocelyn and Michael’s case, the difference in interest on a $300,000, 30-year, fixed-rate home loan would have been about $12,000.
And this is a problem for everyone, not just prospective homeowners. What about the folks who carry credit cards and finance their cars? These people buy their Consumer scores, and then wonder why they are not qualifying for better interest rates. My credit score is high, they think. I guess these are the best available interest rates.
Little do they know that they should take a few simple steps to rebuild their real credit score—their FICO score.
So what should you do about the free credit report scam? Get an accurate representation of your credit score by buying it directly from www.720FicoScore.com.
Philip Tirone
P.S. The only place you can buy a FICO score online is from www.720FicoScore.com. Every single other website out there will have fine print explaining that the score you buy is not the same score lenders will see.

Sometimes, all you have to do is ask.
This is one of the major themes of my credit course. If you want lower interest rates, if you want your banks and credit card companies to wipe away penalties or forgive some debt, sometimes…
All you have to do is ask.
But even though I teach this in my course and in my book, I messed up.
See, I help a lot of non-profit and for-profit companies with their marketing strategies. And I neglected to ask…
I didn’t ask one of them enough deep questions to make sure that our interests were aligned.
So after several months of being frustrated, I finally realized something. I wanted them to make as much money as possible. If they made money, I made money.
But that’s not what they wanted—not in their heart of hearts. They wanted to grow slowly. When it came down to it, they weren’t comfortable with the same explosive growth that I was trying to help them achieve.
There isn’t anything wrong with either of our goals – they just weren’t aligned. If they didn’t make money—and fast—I wasn’t going to make money.
And if I pushed them too hard to grow, the corporate culture they wanted and loved would be non-existent.
So the relationship that we initially established was doomed from the start. We had (and still have) great rapport, and we are trying to find a solution so that we can continue to work together, but it sure would have saved us a lot of time if we had made sure our interests were aligned from the get-go.
So what’s my point?
From now on, I’m going to make sure my interests are aligned every time I enter a professional relationship, create a friendship, or sign a contract.
In fact, if I’m working on a solution with someone, the first thing I’m going to do is make sure our interests are aligned. If they aren’t, we will only be frustrated when working together.
Having aligned interests is a big part of making any area of life work.
It works with professional decisions, personal relationships, and it works with financial decisions as well.
And it also works on a big scale…
Imagine if the banks had disclosed their interests to the people who bought houses pre-2008! If people had known what was in the banks’ “heart of hearts,” would they have entered into an agreement with them?
And on a small scale…
Would you sign up for a retail store credit card if the cashier disclosed the store’s true interests? Imagine that a cashier said, “Would you like to sign up for a retail store card and save 10 percent on today’s purchase? Our goal is to lure you into signing up for the card so that buy more from us over the long-haul and pay a ton of money in interest rates.”
Heck no! You wouldn’t sign up!
So ask away… before you enter a relationship, make sure you know the true interest of the person (or business) you are going to work with.
As always, let me know your thoughts below. Have you recently realized that a relationship isn’t working because your interests weren’t aligned?
– Philip Tirone

It’s true. I’ve written about being a failure here.
And guess what?
My list of non-accomplishments grows longer and longer every year…
So the following quote from President Theodore Roosevelt’s speech “Citizenship in a Republic” spoke to me. And because I know I’m not alone in stumbling a time or two, I thought I should pass it along…
“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better.
“The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”
That’s it for today… short and sweet because I don’t want to try to compete with those powerful words from President Roosevelt!
As always, be sure to share your thoughts below. Did the quote inspire you to rise above some of your stumbles?
– Philip Tirone

If you are getting married, you might be a little worried about how the marriage will affect your credit score, especially if your spouse’s score is lousy.
But right off the bat, let me dispel this rumor: Your credit score and your spouse’s credit score will never be merged together. What your spouse does in his or her own name (past, present, or future) will not hurt your credit score…
As long as you do not join accounts.
When you get married, your behavior still counts toward your credit score, and your spouse’s behavior still counts toward your spouse’s credit score. If you pay your Visa bill late, the late payment will not hurt your spouse, so long as the credit card is in your name only. If your spouse has a mortgage payment and defaults, the default will be on your spouse’s credit report only—so long as the mortgage is in your spouse’s name only.
Most people approach marriage and credit with a one-for-all, all-for-one attitude. They apply for car loans as a couple, open joint credit card accounts, and stop building separate credit histories. After all, they have joined their lives together; why not marry their credit histories?
This might sound like a great idea, but the truth is that you should never vow to join all of your credit accounts. Keeping some credit accounts separate has big advantages. In fact, holding credit jointly puts a couple at even greater risk during times of financial crisis. Here are two common credit pitfalls of marriage.
Marriage and Credit Pitfall #1: Keeping All Credit in One Spouse’s Name
Opening all credit cards and loans in one spouse’s name is not wise, but unfortunately, it happens all the time. This usually happens when one spouse works a nine-to-five job and the other stays home with the kids. The spouse with the paycheck opens all credit in his or her name.
Here’s the problem, though…
Shat happens if something happens to the working spouse? A bankruptcy, death, loss of income, or divorce would make the other spouse vulnerable. Because no credit is the same as bad credit, the stay-at-home spouse would have no ability to secure a loan.
There’s another problem with this strategy. Let’s switch this scenario up a bit and imagine that both spouses work. The wife has a part-time job with a small salary, so all of the credit is in the husband’s name. The couple decides to buy a home. To qualify for a loan, they need both spouses’ income.
The couple now has a big problem: The wife has no credit history, so her score is low. Putting her name on the home loan would endanger the loan. And the husband cannot qualify for the loan on his own—he needs his wife’s income for that extra boost.
Most likely, the couple would not qualify for the loan. At a minimum, the couple would pay a higher interest rate.
This pitfall can be avoided if both spouses build their own credit scores.
Pitfall #2: Joint Credit Cards and Automobile Loans
Imagine that Jack and Diane are married and have joint credit cards and joint automobile loans.
When Jack loses his job, the couple struggles to make ends meet. After a couple of months, they start realizing that they cannot afford all of their bills. So they stop making payments on several credit cards and on one of the two car loans. The credit card bills are sent to collections and the car is repossessed.
And both Jack and Diane’s credit scores are trashed in the process.
Now let’s see how the same situation would play out with Peter and Paula, a married couple with separate credit cards and automobile loans.
When Peter loses his job, the couple creates a strategic plan about their forthcoming financial problems.
Peter and Paula know they can only afford to pay all their bills for three months; the money will run out after that. Peter searches high and low for a job, but is unsuccessful. After three months have passed, the couple decides to stop paying credit cards and car loans in Peter’s name. They stay current only on bills in Paula’s name.
Of course, Peter’s credit score suffers. But Paula’s remains pristine. This means that Paula is able to apply for loans in her name, while Peter learns how to rebuild credit.
Any other questions about marriage and credit? Be sure to leave a comment on my blog, and I will answer it in forthcoming blogs.

I just got off the phone with a client that was not applying for certain jobs becuase she knew that the company would run her credit.
Here is what I told her (2:53 second audio).
Here’s to your future,
Philip
P.S. It’s funny, most people think that they are the only people with financial problems, that is NOT the case.

I’m talking about my business. It’s an ugly, tough, dirty one. Despite the fact that a lot of people desperately need my service, most people think credit is boring…
And those who aren’t bored by credit repair are often scared. They bury their heads in the sand because they just don’t want to deal with their credit problems.
So getting the word out there to the 10 million people who need credit repair?
Well, like I said, it’s a tough and ugly business.
But recently, I had an epiphany that I know will help you get out of a financial mess.
First, some background…
Because I spent so much time figuring out how to spread the word about my program, a lot of my friends and colleagues ask me to help them with their business models…
After all, if a credit guy can do it, a “prettier” business can do it!
So I was recently meeting with a colleague of mine to discuss his marketing strategy. My company has been writing the weekly emails he sends to his list …
And after sending just six emails, he earned an additional $60,000!
Wow! That’s $10,000 per email.
And all he had to do was ask his existing clients and colleagues for referrals.
All he had to do was ask.
Now, this guy is really sophisticated. In fact, he’s one of the smartest people I know.
But he wasn’t asking for referrals (at least not often and not strategically).
When he did, he earned $60,000 in six weeks. And all he had to do was push the “Send” button on his computer.
So what’s the lesson in this?
You have to ask for what you want. If you aren’t calling your creditors and asking them to lower your interest rates or waive the penalties, they aren’t going to.
You have to ask.
That might be all it takes. Call up your credit card company and ask for the hardship department. Then tell them your situation. See what they say.
The worst that will happen? They will say “no.” But I’m willing to bet that 99 percent of them will work with their customers to provide at least a little wiggle room. Maybe they will let you skip one
payment.
Or maybe they will settle your $15,000 credit card bill for 40 cents on the dollar, like they did for my friend.
You will never know unless you ask.
In my program, I teach people to call their credit card companies at least once every six months to negotiate lower interest rates or better terms.
Why not make today the day you call ‘em up and ask?
As always, let me know your success stories by posting a comment below!
– Philip Tirone