The Why and How of The Credit DVD
A friend of mine asked me to help his young daughter – a recent college graduate – get a loan for her purchase of a condominium. I ordered her credit report, and she had a 519 middle FICO score. She had no idea what it meant. Her score read 519 because the City of San Diego reported her 90 days late for overdue fees on library books. She did pay the $60 in fees back in 2000, but the city did not report her payment, and continued to update multiple late payments.
I carefully went through the credit report with her, explaining credit score, what the credit reporting agencies do, reason codes, utilization ratios, late payments, inquiries, and public records, etc. She was stunned by the amount of information and its impact on her daily life. With total despair, she said, "Why wasn't I taught this in school?" I didn't have an answer.
Driving home, I could only think of her question; why hadn't she been taught this in school? I decided to find out why, and see if there was something I could do about it.
For the next year I totally devoted myself to researching the entire field. I read all the recent books and articles on credit scores and credit reports, and went to local libraries to read old books dealing with the subject. I spent long hours in front of my computer reviewing countless Web sites, not only about credit scores and credit reports, but also about credit repair. I attended over 170 seminars, listening to many self-proclaimed credit experts claiming that they had inside information on how the FICO scoring formula works. I listened with growing frustration to so-called credit repair experts who falsely claimed to be able to permanently delete accurate negative information from credit reports and increase FICO scores by 100 to 200 points for a mere $1,500.
While gaining knowledge about the subject, I became aware that misinformation about credit score and the use of credit was not only limited to consumers, but also encompassed educators, regulators, financial professionals and the credit industry itself.
Lack of education is one thing, but misinformation was widespread not only by so-called credit experts, mediocre financial professionals and sleazy credit repair companies, but also in the heart of the credit industry. Take the three credit bureaus, Experian, Equifax and TransUnion as an example. For years the credit bureaus have been making tens of millions selling their own versions of credit scores without disclosing to consumers that these particular scores are never used by lenders.
A number of books and articles have been written about the subject, and some provide good information. However, the majority of books out there are about credit repair, focusing on loopholes that advocate misrepresentation to trick the system. There were no videos. So I decided to make one.
I presented my idea and plan to Vince Ravine, a friend and a movie producer. He recommended James Becket, an experienced writer and director. Jim saw the value in the idea of a video presentation and agreed to work with me on the project.
When producing The Credit DVD, accuracy and correct information was the most important element in the project – the truth about a subject fraught with misinformation. Consequently, every word in the transcript was examined for accuracy by experts at Fair Isaac Corporation, the creators of the FICO scoring model. I was fortunate to make several visits and meet with experts at Fair Isaac Corporation's offices in San Rafael in Northern California. Furthermore, the part of the transcript that deals with credit reports was also examined by an expert at Consumer Data Industry Association, which has among its members the three credit bureaus, Experian, Equifax and TransUnion.
I also became aware that there is a great need in the underserved and well-deserving Latino community for reliable information where many are entering the credit-driven economy for the first time, and where hard work coupled with knowledge is crucial to realize the family goal of sound financial health. Therefore, I produced a superior and totally new version in Spanish: El DVD del Crédito. The text was written to accommodate all Latino communities and does not favor any particular country of origin. The Spanish version was also reviewed for accuracy by an expert at Fair Isaac Corporation.
The Credit DVD Series presents, in a clear, accurate and simple manner, comprehensive background about the most important three numbers affecting the financial health and well being of consumers. I believe I've achieved my objective to fulfill my aspiration to educate and my desire to limit misinformation.