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Credit Education
Credit Revolution
Chapter 21

The Path of the Smart Consumer

Again, this book isn't a rant against using credit. Credit is a terrific thing and it has worked miracles on our economy and our lives. But, the system is nonsensical and clearly slanted in the credit companies' favor. It takes a very smart person to take advantage of credit without being taken advantage of by the credit companies. Or it takes a person with smart help. . .

In fact, few of us pull it off. . . even attorneys can be taken for a ride. When John Heath (a co-author of this book) was young and had just passed the bar exam, he receive a call from one of his student loan lenders. John had racked up some student loans on his way through law school and since he had taken a starter job working for Legal Aid helping disadvantaged people, he had placed his loans on temporary deferment. The lender called John to inform him that he was in default on his student loan. John knew that his loan was in deferment and that couldn't be true. The phone agent told him that there was nothing he could do and hung up the phone. Within a couple of days, John received the first of many collection letters telling him that he was late on his student loan payments. Each time he received a letter, John would call the lender to correct his account and accurately note his deferment. Each time, the agent would say that nothing could be done (after John waited on the phone for an hour or more to speak with an agent.) Finally, after many months of this run-around, John spoke with someone with the ability to figure it out. Apparently, John's student loan had been sold and the new company had failed to accurately note the agreement of deferment. John was instructed to contact the original student loan company and to get a letter proving the deferment.

So, John, now confident that the end was in sight, called the original lender and asked for the letter. They denied his request saying that the new lender already had this information. The agent hung up when John tried to explain that the new lender did not, in fact, have that information. Brimming over with frustration, John called again and tracked down a supervisor. He informed them that he was an attorney and wouldn't hesitate to bring a lawsuit if he didn't get the verification he needed. The supervisor perked up and finally sent the verification of the deferment.

Pleased with the progress he was making, John copied the verification and sent it off to the new student loan lender. He followed up with another call just to make sure they had straightened it all out. The agent confirmed that they had received the verification and that his account was now showing as "current." Mission accomplished!

But, what John didn't know was that the lender had already reported to the credit bureaus that he was over six months late on his student loans and that clearing the matter up had done nothing to salvage his credit rating. Six month passed and John took a new job three hundred miles away from his hometown. John and his wife were excited to move to a new place and to buy their first house. But all their dreams came crashing down in an instant when they discovered that John's credit score was abysmal due solely to the misreporting of the student loan company. The mortgage broker called to tell them that his credit report was showing a 120 day late payment on his credit report.

John's blood began to boil. He told the broker that he had fixed that problem months and months before. The broker offered the services of a "friend" in the "credit repair" business. John reluctantly paid the friend $1,000 up front to fix the problem. After paying the money, a few days later, the late payment vanished from the credit report. John and his wife could move in. All was well.

A couple months later, John pulled a copy of his credit report, just to be absolutely sure and low-and-behold, the 120 day late payment had re-appeared. John's heart sank. Would this ever go away? Again, he picked up the phone, with a lump in his stomach, and began to call the credit bureaus and the student loan company all over again. For months, he called and wrote, wrote and called. Finally, after pouring dozens and dozens of hours into that one error, his credit reports came up clean. It had taken one year from the day John had first heard of his "late payment" problem to the day John was finally able to fix it. Shortly thereafter, John began to look for a way to become part of the solution in the lives of people with similar frustrations. John found Lexington Law Firm and dedicated his legal career to the pursuit of creditworthiness among deserving Americans. Looking back, John noted that, if he had only had the chance to hire someone experienced and knowledgeable like Lexington Law in the first place, he would have avoided countless hours and months of frustration.

There is volumes to learn about the path of the smart consumer -- countless books, blogs and bulletin boards are dedicated to the intelligent use of credit and the credit system. You have the power to make yourself into just such an expert. Or, if you would prefer, you can tap into the experience and wisdom of others who have walked that path before you...


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Credit Revolution: Path of the Smart Consumer 2007 John C. Heath, Esq., Dr. Randy Padawer, Jayson R. Orvis. All Rights Reserved. Published by Far Cliffs Multimedia, LLC

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