March 26, 2009 | The Big Biz Show with Sully and Russ T. Nailz | Adam Fullman discusses how to avoid credit repair scams and what you can do to legally leverage your consumer credit rights to challenge questionable credit listings.
Sully — In the court system, you are presumed innocent until proven guilty, however, in the credit system it may feel as though you are guilty until you prove your innocence. Thankfully, our next guest and his firm, the Lexington Law firm have demystified everything for us in the world of credit including what the heck the FICO® score is. Please give a Big Biz Show welcome to Adam Fullman. Adam, how are you buddy?
Adam — Good to see you.
Sully — Adam has been on the air with us, gosh, three or four times for the radio audience, but the T.V. audience hasn’t met him yet. I want to say a little about the Lexington Law firm, because we found you guys, because in these times, I guess since October with all the foreclosures, all the lost jobs, we got problems with credit. You guys are a general service consumer advocacy law firm. You help consumers take action against errors on their credit or just the whole system?
Adam — Errors on their credit, negative items of any kind that can be challenged. What you mentioned in the intro is right. In the courtroom, in a criminal setting, you’re innocent until proven guilty. And unfortunately, the way the system has been set up, I mean, I’m thankful to have a job, but the system is broken.
Sully — Yeah, you’re the only one doing good in these times, buddy.
Adam — You know, that’s another thing is, we expect to do better because credit repair is something that you do when you are in recovery. You repair. And so, we expect that we’re going to be helping a lot more people in the near future. But, what we do is, we leverage the Fair Credit Reporting Act, which is a Federal law, to switch it back over from being guilty until proven innocent to being able to challenge an item and say, “Okay, now it’s your responsibility Mr. Creditor or credit bureau, to justify why you’re saying these negative things about me.”
Russ — Doesn’t the fact that you just call them and like, “I’m so-and-so from, I’m a lawyer…”
Sully — Yeah, obviously, they’ve got to know you by know, don’t they Adam?
Adam — Yeah, they do.
Sully — They turn and run at this point. What’s scary is how many times, and this has happened to everybody I think, is that you go to get a house, you go to get a car, and all of a sudden it’s like “What’s this?” There’s the, what’s this factor that happens on everybody’s credit report, and whether it’s right or wrong, nobody gives you a chance before it shows up on there. So it shows up on there overnight, but it takes months to get off there sometimes.
Adam – Yeah, absolutely. And that’s why the first thing in taking control of your credit, the first thing you’ve got to do is look at your credit report. Order a copy of your credit report. Don’t have your friend that’s a mortgage broker get it for you because later we’ll talk about how that hurts you. It dings your credit. But just buy… it’s thirty-five dollars, or free in certain circumstances.
Sully — So like the guy working at the Red Lobster playing the guitar, is that what you’re talking about?
Adam — Yeah, you can order it from that website. Any of the websites that are reputable websites. And actually the credit bureaus that are actually reporting the negative items about you have figured out that they can now make money off of you by having you buy copies of that very same credit report.
Sully — Now, I thought you get a copy for free or something like that.
Adam — You can. Absolutely you can.
Sully — Now how do you do that?
Adam — You can go to FreeCreditReport.com, actually AnnualCreditReport.com and under certain circumstances you can get one, actually once per year, you can get a free copy of your report. You can also get a free copy of your report if you’ve recently been turned down for credit and you can prove that, you can get a free copy.
Russ — Sometimes, isn’t it easier to just pay it? Like, eighty bucks from Dr. Schlepop or whatever. I didn’t know I owed that. Tell me just pay it off and my credit is back to good or…
Sully — Or does it stay on there?
Adam — See, that is the problem with the system is most people believe that. They think, “well I’ll just pay it.” And then I’ll get a call from a client, “I don’t understand, I paid that bill, why is it still there?” Because your credit report is your history, your credit report is what has happened.
Sully — Oh, so regardless of whether you paid it or not, it still happened. Or it might have happened. Or it allegedly happened.
Adam — So instead of somebody saying, “Hey Sully’s a deadbeat, he owes me money.” Now it’s, “Did you know that Sully used to be a deadbeat?”
Sully — Which happens most every day somewhere in this country
Adam — That reminds me of the lunch bill from the other day.
Russ — Not in the air, dude.
Sully — So you can’t say I’m a deadbeat, but you can say I used to be one. Thanks for that. Appreciate it.
Russ — Former deadbeat, Sully.
Adam — For seven years, for seven years.
Sully — Seven years, that’s a long time.
Adam — So you get to challenge that item though. You get to, whether you pay it or not, you do get to challenge the item under the Fair Credit Reporting Act and ask that the item be verified and see if they do what they need to do, make them jump through the hoops, to verify and item and keep it on your credit report.
Sully — Adam Fullman is our guest, he is with Lexington Law firm. Now you are the, you’re the Directing Attorney. This is your gig, this is yours, and this is a pretty big thing because in researching this, ’cause I am a journalist Russ… the news ticker. But seriously, you’ve helped like a half million people across the country with this problem. Now I gotta believe that since October, there’s valid things on people’s credit reports because of lost jobs or whatever, but there’s got to be a lot of errors in the system. Because there’s so many people and so many credit cards and there’s so many loans, there’s gotta be mess-ups somewhere. Is that what you’re talking about? Taking some of those away?
Adam — We’re talking about both. We’re talking about you have the right to challenge an item that is incorrect. But you have the right to challenge an item that may be correct. Now the Fair Credit Reporting Act prohibits making a false statement to a credit bureau. And that is, we comply with that. And also, the Credit Repair Organizations Act that governs what we do. But you are allowed to challenge an item. So one this you want to be careful of is the fly-by-night people…
Sully — Yeah, because, I was going to bring that up. Because you are a law firm, you’re an attorney. It’s easy to find you. You go online, they removed 665,000 negative items just last year alone. But you see these things posted on the side of the…
Russ — Rick’s credit report…
Sully — Call us now, free… How do we avoid that scam? Let’s face it. Some folks will be driving down the road, not remember who you are. Some folks are going to call you right away. But how do folks avoid that whole scam?
Adam — Well, first of all, you do want a law firm. Second of all, you want someone who practices in this area, and is registered in California here. Which just to kinda clarify, I am the directing attorney for all of California which is only 40 million people. It’s a small market. But John Heath handles the national program and then we have attorneys in multiple states. But, in California there is a registration process that I go through. I’m bonded. Most states have something similar. So you want…
Sully — So they’re safe as kittens if the go to a company like yours. If they go to a law firm, it’s better off than not. You guys specialize in this stuff. You guys do this every single day. So you know the ins and outs of it. Tell me about a guy that has done nothing wrong, whose mortgage went upside down because his neighbors went into foreclosure, his house value is upside down, and now the bank is calling part of his loan or something like that. Or he lost his job. When we get back from the break, I want to go through all those things. Because, it seems to me, like this FICO® number is just a number, right? But it’s not giving the whole picture.
Russ — What does that stand for anyway? FICO®…
Sully — Fair Isaac something. That’s it. It actually should be FICO®
Adam — Fair Isaac Company
Russ — And you do want to have an attorney that deals with this. Not like, if you get an entertainment attorney and he’s trying to deal with it it’s like “Well, we couldn’t, you know, fix your score, but you’re going to open for The Who next Friday night. Yeah!”
Sully — Russ and Sully. It is The Big Biz Show on the Wealth Television Network and the Business Talk Radio Network. Adam Fullman is our guest. We got another break with Adam. LexingtonLaw.com or 800-214-0922.
Russ — I want to add points to my score. Can you do that too?
Sully — Oh yeah, if you pay Adam on the side.
Adam — There’s things you can do, absolutely.
Sully — Pull your wallet out. Russ and Sully on the Big Biz Show. Do not go anywhere. Adam Fullman with LexingtonLaw.com is out guest. See you in a minute.
Sully — Real quickly, FICO® score, we talked about this on this program before, but how does that break down? Like what percentage causes my credit score to go up and go down?
Adam — The biggest chunk and the one that you’re going to have, you’re going to want to work with is your history which is 35% of your FICO® score. Okay, so your FICO® score is a mathematical formula…
Sully — It’s the Fair Isaac score, correct?
Adam — It’s the Fair Isaac score. Actually, they’ve actually changed their name to FICO®.
Sully — Okay, so Fair Isaac Corporation was a predictive technology company that used to do insurance, that used to predict how bad, worker’s comp. plans. So what happened? They created a … so they messed us all up. We are now a number.
Russ — Un-Fair Isaac
Adam — And the idea was to take out discrimination and prejudice. It seemed like a great idea at the time.
Sully — Make us a number.
Adam — Make us into a number. Which seems like it is a good idea, but then you’ve got other problems with that.
Sully — It’s because it doesn’t give you a whole picture. I mean, if a guy loses, pays his bill for 20 years, and then loses his job in this economy.
Russ — He’s bad
Sully – Now, now he’s just a number. Do people know that this is a problem? The powers that be at FICO®?
Adam — Yes, but there’s now, FICO®, they love their own product so that’s what this is and they’re not going to say anything against it. And it’s entrenched. So that’s not going to be changing. And in fact…
Sully — You mentioned something about the stimulus package having something about credit repair?
Adam — Right, the stimulus package right now, there’s set aside for credit repair. We have no idea how it’s going to work, what it’s going to look like. But, I mean the word “credit repair” appears in the stimulus package.
Sully — So the problem is they’re talking about the U.S. Government, they’re not talking about our report. They’re talking about ____ has had them on their bottom rung report.
Russ — So you can do like the government, borrow money to pay back borrowed money, or to… you screwed up your credit so now you’ve got to borrow money to … oh boy.
Adam — All I know is, President Obama is one of our monthly $79 a month clients…
Sully — Yeah, he tucks a bunk(?) right over there at the Lexington Law firm, everyone.
Adam — Disclaimer: that was a joke. Even if it wasn’t funny.
Sully — So the stimulus package though, has actually the words “credit repair”?
Adam — Yeah, it does. And this is going to be important because, even right now, the phrase that’s being used is “720 is the new 640”. You used to be able to get into a new home…
Sully — And dead is the new 60, isn’t it Russ? 720 is the new 640? ’cause 640 was “A paper” last year?
Adam — Yeah, you could get into a house. And that’s probably not going to change even when we recover. So, what we were talking about with the FICO® score, 35% of that is your history. So what I’m concerned about is the people out there that say, “Okay my mortgage is, I got this ninja loan snuck up on me…”
Sully — Wait a second. Remember the called yesterday? We had Dave from Missouri call up.
Russ — They cut his line of credit.
Sully — Yeah, Dave from Chesterfield, Missouri called yesterday on the program and said, “Look, I got a loan with”, and I’m not going to say the name of the bank here on television, but “I got a loan and I got a $57,000 line and they just pulled it out from under me”. That’s going to affect his credit. Will he be able to fix that?
Adam — Yeah, well, he can. Obviously, we don’t want to make any promises that we may or not be able to keep, but he can. That’s the point is, there’s something you can do about it. But what you don’t want to do is just give up. You’ve got to minimize the damage.
Sully — Don’t give up, that’s…
Russ — Well, words to live by.
Sully — That does it for us. Adam, thank you so much for swinging by. Adam Fullman, Lexington Law firm, 800-668-0137. Russ and Sully, we are out of here.