October 11, 2016

Real Estate Podcast: Improving Credit: 90 Days to Credit Improvement

Episode 243:

During his 25+ years in business of helping folks to create wealth tax free, David Cole has seen time and again the dramatic differences in the outcome between people who step up to the plate and take charge of their financial lives as opposed to those who continue to do exactly as they are told and “trust” the system .

A favorite quote from his book is now more relevant than ever, “Get Rich Slow” …

“As a result of others controlling your money, you’ve been lulled into a false sense of security, believing someone else is standing guard over your hard-earned dollars and, thus, guaranteeing your financial future.”

Today, David is recognized throughout the country as one of the foremost experts on the subject of retirement plans for hands on real estate investors. He specializes in structuring 100% self-directed retirement plans which provide his clients checkbook control of every penny of their retirement money.

David has consulted with hundred of hands on real estate investors helping them to overcome obstacles that were limiting their success. One issue that kept coming up with alarming regularity was that of buyers who had had poor credit scores and could not obtain a mortgage.

To find a solution to his common obstacle, David dived deep into the credit reporting world and what he found both shocked and discouraged him. The cards are stacked, on purpose, against the average individual and without an expert on their side they are ill equipped to win this war.

David now educates folks around the country as to what they are really up against and the steps involved in improving credit, as well as monitoring and protecting their personal credit records and scores.

David, along with his wife ,Jill, reside in Prescott, Arizona. Where during their personal time they are working towards creating a hands on Aquaponics education center to teach families how to grow their own pesticide free, organic, fruits and vegetables.

What you’ll learn about in this episode:

  • Why your life is controlled by your credit score
  • What happened when credit scores tanked and what you can do about it
  • How credit card companies make billions by setting you up to fail
  • Adverse risk: how what you do with any credit company impacts any others you may use
  • What you really need to know about credit bureaus
  • Improving credit and doing so within a reasonable, and affordable, timeline
  • Defending your credit report
  • The lawyer David knows that can help fix your credit in 90 days and how he does it
  • Why most creditors usually take the cheap way out and how this can be a major benefit for you
  • The federal law that protects you from creditors
  • What the lawyer’s process looks like after the initial 90 days are up




Mitch: Hi. This is Mitch Stephen. And, I have the honor and privilege of talking to Mr. Dave Cole. And, he’s gonna talk to us about credit repair and how important it is. Now, one of the things I wanna say is, we have like a real estate venue here. But, credit repair can help a lot of different people in a lot of different ways. And, the way I’m thinking about it is, and the reason why I really want Dave to be here and talk to us about this credit repair and how important it is, both to have good credit ourselves and then to help our clients achieve the kind of credit they need to make their purchases. You know, I know a lot of people that want to get into real estate. And, a lot of those people, and me included, started out by having a job.

And so, you know, whether you’re selling cars or you’re selling insurance or you’re — whatever it is you are doing. Maybe you’re not selling anything. Maybe you are just working in your offices, you have overlings and underlings, helping people achieve their good credit is a great attribute and it’s something that can help everyone.

I think, if a person is out there in the field doing their job, and they really want to find the resources to get into real estate, maybe one of the ways you could start clearing out some funds or making some room for education is to reduce your house payment. Let’s say you have $1,400 house payment, and Dave can show you a way to clean up your credit and get you an $800 house payment, that clears up $600 for you to launch into the endeavor that you really wanna do, which real estate is investing.

And so now, you’ve got some funds and you’ve loosened up some funds to get this done. I don’t know if I’m out in left field here, Dave, but don’t you think that to clear up some room to be able to spend some funds on your education so that you could grow and expand yourself, do you think it is a good way to look at credit repair from an individual standpoint?

Dave: Absolutely, Mitch. You know, our credit scores are our most valuable financial asset. Unless, you have all the money you need to pay cash for everything, your life really is controlled or governed by your credit scores. That determines whether or not you can go forward in a positive way. It determines your level of lifestyle. It determines even your retirement future, because you need to use to the leverage of financing to accomplish your goals.

So, on a personal note, as you just mentioned, being able to get your own credit back where it should be so that you can put yourself on a better financial footing. You have more cash flow, then, to put into your pocket, instead of sending it off and wasting it on higher interest rates with some creditor. Now, you got a tool to begin that boot strapping method, if you need to, to get you into being a real estate investor. And, you know, it’s a step at a time. What’s that old saying? “A thousand mile journey starts with one step.”  And, this is the first step for a lot of people. So, I think it’s a really good idea, Mitch.

Mitch: I don’t think people understand exactly how traumatically their credit score affects them in the long haul in all the different arenas of their life. And, you know, in the example I just used, if you could get your house payment from $1,400 to $800, that’d free up some cash. But, it’s not just that one facet that it affects. What are the kind of — what are the facets that bad credit or good credit can affect you in life? What different arenas?

Dave: Well, again, it comes down to virtually everything. The fact is, this recession that we’ve came through, and some places are still working themselves out a little bit, left everyone, Mitch, with financial scars. I don’t care how much money you make, how old you are, how young you are, male, female, what you do for business or a job. Everyone has some type of financial scars. And, we are going to talk about that i’is not all your fault today. I’m going to show you behind the scenes a little bit of what’s going on with these companies.

And so, when you get down to it, you are basically defined by your three credit scores. And, that is from the three credit bureaus. That, basically, is your report card, as it were, regarding your honesty, your integrity, your reliability. That tells a potential lender — a person, you know, even starting out renting out an apartment or something.

Everything determines, or is determined by your credit score. And nowadays, employers are regularly checking credit scores as an indication of the dependability or ethical nature of a potential employee. So, yes, Mitch, every area of your life, credit scores are an indispensable item used to determine who you are.

Mitch: I am positive that people don’t know how big an affect it has, and we’re going to learn today. Now, I once heard, and don’t quote me exactly, but, I’m gonna be really close here — that in our lifetime, if we took our whole combined income in our life, we’ll pay out like 33% in interest, and we’ll pay out like 32% of everything we make in taxes. And, that only leaves us with 35% percent to get on with our life and become a success. And that’s some slim pickings.

And so, what I tell everyone that I talk to, who asked me, “How do we get ahead?”, I say, “Well, first thing you have to do is you have to develop a system that helps mitigate your taxes legally. That you are able to reduce that amount that you pay in taxes is certainly in the beginning. As we get wealthy or wealthier, the taxes just become a part of life. But, in the beginning, there are things that we can do that can mitigate these taxes or push them way out.”

The other thing that we’re going to talk about today is reducing that 33% of our life’s income that we pay out in interest. And, that is a huge number. So, if we could figure out how to mitigate that number, then we’re going to have more money at the bottom line, so that we can go achieve our dreams. So, tell us more about how we can mitigate that interest expense in our lifetime.

Dave: What we’re going to talk about, Mitch, is something that I had to go out and find. I am a real estate investor. I’ve been a real estate investor for 30 years. And, being a real estate investor, you wear many hats. Let’s just take a run of the mill example. You go and you find a property, with what I call “meat on the bone”. You know, there’s profit to be made in this property. You get that property purchased. Then, you go through whatever process you need to go through to get it ready for sale.

But, that’s just half of your job. Your next half of the job is to convert that hard asset, that real estate into a profit. So, that means you’ve got to put the property in the market. You’ve got to find a buyer, and you’ve got to get that property closed. So, in reality, at some phase of being a real estate investor or realtor or whatever, you are basically a problem solver.

And so, the problem that most people run up against in real estate towards the end is the credit score issue that has hurt so many people. Because, again, the recession caused so much damage, it dropped so many people’s scores, that, although they have the capacity, monetarily to buy the property etc., those scores will not let them. And, frankly, people don’t know what to do about it. They’re stymied. They don’t know who to turn to.

So, if you have the ability to solve this problem for a potential buyer and to solve it as quickly as possible, you’re going to be successful in turning that property, which means your money’s back into a new property making more profit. And, that increases your yield. And, that’s what you are trying to do as a real estate investor. You keep that money turning over and working as often as possible.

Mitch: I’d like to give a real life example.

Dave: Yeah. Sure, please.

Mitch: Exactly what you are talking about. You know, because — back when they raised the credit score bars, and it threw a lot of people out of getting new loans for homes. And, coupled by the fact that I personally chose to overcome this problem by owner financing houses, because it was so prevalent. I mean, so many people couldn’t get a loan, especially in the areas of town where I was buying houses, that I all but gave up on doing lease options or whatever where the people will gonna get their credit repaired and get a new loan.

But, with the advent of what you’ve told me, I’m able to go out — and, I had this one house where I sold it owner financed for $120,000, but I only had like $60,000 in the house. And, I put the person in on owner financed, because it was very obvious to me that they were not going to be able to get a loan with the credit score that they had. Then, I met you. And then, I was able to get their credit cleared up.

Now, they could have gone the whole 20 years and never gotten a new loan. And, I would’ve been happy, because it was a decent deal. But, I just recognized this. And, man, if they could just get their credit cleared up, and they’re not too far from that, I mean, not too far away. They might just go out and get a new loan, if I could show them how it works. And, they go and get a new loan for the $120,000 or whatever they owe me that time — $118,000 and they could cash me out. And I could realize my $58,000 to $60,000 profit right now. You know, or, in short order.

And so, that’s what we’re talking about. As real estate investors, being able to recognize when we have people that are close to being able to accomplish this goal, but they just don’t know how to get this credit repair cleaned up, their credit repaired.

And, the problem with credit repair these days is there’s so many people not doing it right, or even downright scams. You know, where people are just taking money and, if anyone out there has introduced their customers to credit repair people, I would like to see the show of hands how many of them didn’t work out at all. And actually, was quite — you were quite embarrassed that you even recommended the people to fix the credit,  because it just didn’t turn out good.

I can’t tell you, Dave, how many times that’s happened to me; that I’ve recommended credit repair people, and it just turned out to be an embarrassment. So, number one, when we talk to Dave, we’ll learn to recognize these people. He’ll tell us how to recognize them. You will learn to recognize when it is time to call Dave. So, clue us in Dave. When can we use these tactics to capitalize? And, tell us, from A to Z, what we need to do.

Dave: Okay. Well, what I want to do is to go back to a statement you talked about — we talked about earlier. This is such a prevalent problem, either on a personal basis, family members, friends, potential buyers of your property. This is universal. This affects everyone. So, the first thing I want to assure everybody that, even if you made some mistakes, what’s happened on your credit records at the three bureaus is not all of your fault. Okay? There’s been some stuff going on behind the scenes. Maybe, you’ve sort of felt like that. So, what we’re going to do today is we’re going to pull back the curtains, we’re going to let you look back there at what Oz and Oz’s buddies are up to. And, I’m just going to show you a little bit of information.

But, I tell you what, when I’m done with just this, you’ll probably want to go back there and give Oz and his old buddies a good old fashion beat down. Because, you’re going to found out that lenders have actually turned against their own clients. And, they use the recession as an excuse to really begin a feeding frenzy on their own customers. They — what’s that old saying? “They turn around and bit the hand that feeds them.”

So, let me give you a real quick example. It’s called manipulating the rules. And, I think everybody listening will definitely identify with this. Now, let’s just take a credit card as an example. A credit card company, maybe you have several that you have accounts with. Now, every once in awhile, you’re gonna get in the mail a cardholder agreement update. You know those ones you open them up, and they’re like 15 pages long and they’re little tiny, microscopic print. Well, that’s a notice that they’re sending to you that there’s been some changes to your account. So, anytime they make changes to the rules governing your account, they are required by law to send you that notice. And, later on, if you break one of these rules on that notice, you pay a penalty fee and you can’t do a thing about it. Because, they legally notified you in the mail.

So, my question is, how many people listening have read those cardholder agreement notices? Mitch, it’s minuscule. Very few of us do. In fact. I was doing some research, and one of the research articles that I went through showed that the credit card companies make those agreements very hard to read on purpose. Not only do they reduce the font very small., they use a font that is not friendly to the eye. So, they don’t even really want you to read those agreements. So, millions of people unknowingly fall into these carefully designed traps, these manipulations of the rules that they create, and the credit card companies make billions, billions of dollars.

One report said 19 billion a year in extra fees offer over and above the interest that they charge you on the account. We call it death by a thousand fees. Pick up one of your credit card agreements, and just go down through all of the fees that you have. You’ll see a plethora of these fees.

One of these that has come out recently is called an activity fee. And, that’s one of my favorites. It is actually a non-activity fee. In other words, “We’re going to charge you a penalty, because you haven’t been using your card.” I mean, that’s the height of greed to me. But, that’s the game that these credit card companies play.

So, what they do really is they set you up to fail. They set you up to legally double dip in your wallet. So, break one of these fees, and you, by default, legally have to pay a penalty fee of some kind. And, they’re usually anywhere from $25 to $50 in a fee.

So, when you read your agreement, it will disclose that. It will say, “If you missed a deadline for a payment, or break a rule, you have triggered penalty A.P.R.” And then, you look at penalty A.P.R., and it says it,then, can go to the maximum default rate. And, the default rate on a lot of cases, I mean, it’s heart stopping. It is like 29.99%. And, they get to immediately move — charge you that interest rate of 25% to 30%, whatever it may be, on all of your new charges and everything going forward.

Now, the only small silver lining is the Federal Government enacted a law that said they can’t charge you that new rate backwards on previous purchases. Those have to remain at the agreed upon rate. But, everything going forward is now this huge default to 25-30%, and on top of that, they tack on the fees and they make the interest rate on top of that.

It is really a horrible game that they play with people to, basically, try and keep them financial slaves for years and years and years. Now, that may happen with what we call a predatory lender. A company that really wants to set their clients up to fail to get that extra money out of them. So, the natural reaction, Mitch, to be, “Well, I don’t like that so-and-so company. So, I’ll just pay them off, or drop them, or transfer to another card and forget that.” Right?

Mitch: Yup.


That’s a natural way. We’ll just dump them. They’re not being fair. But, here’s the problem. Were you aware that your other creditors monitor your credit files? They scan. They monitor your file for activities and can at any moment, at any time increase your interest rate to the default premium, or a higher premium, or a higher rate under a legal probation known as “adverse risk”.

Adverse risk says, “Whoa, we saw that you had a problem with this company over here. They raised you to the default rate, therefore, we’re gonna do the same, because, you’ve become a bigger risk to us. We think you may default on us.” And, they can do that at anytime. So, it is not just one card. They’re all basically playing this game.

So, then what happens to your credit bureaus? You’ve got your three; Trans Union, Experian and Equifax. These are for-profit companies, Mitch, that are in the business of selling information about you and I. Some people mistakenly think that they’re run by the government. They’re not. They are for-profit data information companies. And, they are not required by law at all to have accurate information in their files. So, they get all of their information from all these financial sources. So, from credit card companies, mortgage companies, car lenders. All of these companies report into the credit bureaus, and they assimilate this data into your file.

The interesting thing is that a large part of that data may be completely false or incorrect. It can — Mine, several years ago, when I went through and did an analysis of mine, I found information about people — I didn’t know who they were — that I had to dispute and have removed from my credit file. So, there’s a lot of mistakes.

CBS 60 Minutes did an in-depth expose on this. Spent a lot of time researching this. They said, at that time, which has been 2-3 years ago that they did the report, they said at least 40 million Americans have extensive errors in their reports at these credit bureaus that’s impacting their ability to do the things they want to do through financing. So, it is a serious, serious problem.

But, the important point to take away about these credit bureaus, they are not required to verify the information is accurate. So, mistakes are made, and mistakes are recorded. On top of that, Mitch, they compound the problem, because of all these things that they do at the credit card companies or these lenders. So, now, “This payment was late, and we increased your rate on this one,” and all of this stuff is garbage, as it were, piles up inside these credit bureau reports. And, there goes your score, straight to the basement.

And, again, a lot of this isn’t your fault. But, people don’t know what to do about it. They don’t know how to pull their free reports, for example. And, by law, every year, every 12 months, you can pull all three reports, all complete, everything on you for free. No charge or whatsoever. You’re given that right. But, once they get it, they don’t know what to do with it, and they don’t know how to fix the problems.

And, that’s what I ran up against was just lack of knowledge of what to do. And then, Mitch, you hit the nail on the head earlier. They go to the people who say, “Oh, we can fix the problem,” and they don’t. Because, the recession changed how everything works.

In that, in-depth research by 60 Minutes, they literally tracked where these letters go; these dispute letters. Because, what’s happened with the recession is that the three credit bureaus are literally buried with millions of dispute letters every month, because everybody’s been told, “All you do is write a letter to the credit bureaus, and they’ll take care of it.” They don’t. They can’t. They really don’t want to.

So, what they did was that they outsourced all of this letter processing to foreign countries. And, these employees in these foreign countries, CBS 60 Minutes said, they have, in most cases, less than 1 minute to read your letter and decide what to do with it. So, you know, what happens in most cases, in all these barrage of letters that these so-called credit repair companies send to the bureaus, basically, a standard response comes back to you and says, “The disputed item remains. Contact the creditor.”

So, all they’re doing is passing the buck back, and saying, “Hey, you’ve got a problem. Go talk to your creditor, because we are not gonna deal with it.” Now, it doesn’t mean that there can’t be some changes made by the credit bureaus. From time to time, they will do that. But, in the majority of cases, they’re just going tell you to go to your creditor and work out the problem with them.

So, you know, this is the problem we’ve been presented with, and this is just the tip of the iceberg of what’s really been going on behind the scenes in the credit industry. And, with your credit determining what’s gonna happen in your life, what you can do, what you can buy, your lifestyle, all these things because it’s the determining factor on whether or not you can borrow someone else’s money to accomplish those things.

You know, if you don’t learn to monitor — to repair your credit, to monitor your credit, and defend your credit, well, basically, these companies are going to do with you as they wish. Now, let’s take it back from a personal application. Let’s circle back to you as a real estate investor to the scenario or the problem I originally proposed.

And, that was you found a client, they’ve got the down payment, they’ve got the job stability. What they don’t have is good credit. They either can’t get approved for a mortgage at all, or, if they get approved, they have a penalty rate or interest rate that’s high enough, they can’t comfortably afford the payment. So, this good buyer, this property, this otherwise qualified buyer cannot buy your property. They lose and you lose. I mean, is that a good assessment of what a lot of people run into, Mitch?

Mitch: Man, it infuriates me what you’re telling me right now, I just — it makes me mad, because I don’t think people understand how far reaching it is. Because, I know that they check your credit when you want to buy insurance for your homes. And, if you don’t have good credit, you get different rate.

I mean, it goes on and on. It’s not just the increases in the credit card rates that you pay, not just that you can’t get a lower interest rate on your loan because of the credit score, but — is there anything else? I mean, I’m just thinking. I know that the insurance companies check you, and you get a different rate if you don’t have good credit. Is there anything else that affects me?

Dave: Well, you know, let’s go back to that. Yes, house insurance is one, but, you know, the real killer is car insurance. The car insurance companies pull your credit scores, and they all also have another one that’s for car insurance companies. I want to say it’s called “Advantage”. I’ll have to go back and look at that. But, they make a decision based on your credit scores as to what your premium will be. And, the difference between good credit and poor credit is about 50% more.

So, if somebody is paying $1,200 a year with good credit, they’re going to be $2,000 to $2,500 a year with poor credit. It’s not really fair to people to be beat down, because of a credit rate, but that’s just our system. That’s how they determine what kind of risk you are to them, and whether or not to accept that risk.

So, when you went back and — in your introduction, Mitch — and you’re saying, “Listen, if you need to clean up your own credit, refinance your house, your cars, you’re going to find the cash to become a real estate investor, well, this is how you do it. You get a different mortgage. You refinance your cars. You get better car insurance and lower the rates. All of these things that your credit affects, that can be a dramatic, a huge cash flow savings for you that you can reposition for your benefit in becoming a real estate investor.”

Mitch: And, the thing about it is, is you don’t have to go back and renegotiate all these things. You just have to get your credit score up, so that it’s renegotiated for you. Or, if you go to — you have better offers from companies that are more competitive, if you have better credit scores.

So, it’s across the board. I just don’t want people to minimize how much money it can cost you a month because you have bad credit. It’s just not your credit card statement. It’s across the board

Dave: Absolutely.

Mitch: And, it infuriates me, because I don’t know how many times, I pull up to try get a person a new loan on a house, and I’m looking at the credit report, and they go, “Well, that’s not me. Well, that’s not me. I never even lived in this place.” And, they go on and on, and I’m thinking, where in the world did people get the right to just defame you?

And, fortunately, the laws are stacked in our favor, so the recourse is stay on top of your credit to stop this from happening. And, then all this stuff will go away. But, you’ve gotta have some kind of bulldog in your corner doing this for you. You have to have some kind of — you’re going to need some help, because it’s not something that you’re just going to learn how overnight. I see these things all the time. “Learn how to fix your own credit.” I think that’s a complete waste of time. Am I correct?

Dave: Pre-recession, Mitch, in the early late 1990s and early 2000s, it was doable. It still was. It was still a system that could be used, but the recession, again, changed everything, and there’s so many now — 10s of millions or more people affected — that the sheer numbers of people have really shut the system down. It doesn’t work the same.

And, so, you mentioned just a moment ago, you have to find someone, you have to do something about it. You have to understand your credit. You’ve got to defend it, monitor it and fix it. And, that sounds overwhelming to people, but it doesn’t have to be. Because this was my challenge.

I ran into this problem, and, again, I worked with real estate investors all over the country, and heard the same re-occurring theme: “I’m tired of finding great buyers, and I can’t get them financed. And so, I have to work harder to find the buyers, ultimately, that are qualified to get a mortgage.” I said, “You know, this is unacceptable. This has to stop. Okay, fine. The rules have changed. We have a new economy. We have a new way of doing business, that’s fine. I’ve got to find a new solution.” So, I went digging.

Now, my way of digging is not just trolling the internet, looking at stuff. I work with attorneys. I’ve worked with attorneys and national experts for years. So, I put the word out through all the attorneys, the CPA’s, the experts that I know and work with, and said, “Guys, here’s the problem. What’s the solution? What if – who are you using? Who’s doing the job?” And, I had, besides a lot of these professionals commensurate and say, “Well, I don’t know, but when you find them out, find the professional, would you call me? Because I need them.” [LAUGHTER]

This affects, like I said in the beginning, everyone. No matter your level or experience. I kept digging, I kept digging and all of a sudden, I had the same attorney come up several times from several other attorneys. And, I said, “Bingo. Here’s the guy I want talk to.” So, I got hold of this gentleman, and talked to him, and was delighted with what I found, because he gets the job done. I’ll show you just how simple it is — what he does from his side. And, he’s been doing it for years.

Now he started his career over 27 years ago as a chief counsel for a major financial institution. He was, I believe, in the consumer law division. And so, he was on the inside of the beast, as it were, seeing how things were done and how things went on. After a while, he said, “You know what? The corporate world just isn’t for me.” And so, he stepped out into private practice.

Well, he wanted to help people. And, he saw what went on inside the company. And he says, “I want to help people get their credit back on track, monitor their credit and defend it. And know what to do, and be in control of this really important asset that they have.” So, he’s been doing that for over 20 years. He’s helped over 10,000 people get their life back on track, and he does it in 90 days or less. Not this long, drawn-out situation. But, again, he has special knowledge. He knows exactly what to do and how to do it, and he doesn’t do it the old traditional way.

Because, the old traditional way of credit repair, the way that has frustrated you, Mitch, and a lot of other people, is they simply send a barrage of letters to the credit bureaus. And, what they say is, “Oh, you know it’s 75 bucks to sign up with us. It’s 75 bucks a month, and the next 7, 8 months, whatever, hopefully, your credit will improve.” They know full well what’s going on. They know the credit bureaus are overwhelmed and are not responding positively.

They just sell the hope that your credits going to repair. In exchange, they’ve got a massive monthly cash flow coming in from 10s of thousands of people hoping to repair their credit. That’s not what it’s about when you’re a solution, or a problem solver. You’ve got a goal. You want to get your client in position to buy that house. You need somebody who knows what they’re doing. They’re gonna do it as fast as possible, and that’s what this attorney does. So,…

Mitch: I’m guessing, you know, this attorney found some teeth somewhere, where he can bite where it hurts. So, I’m really interested in where you’re going.

Dave: Big time. Now, I will say this: He does need to know where the credit bureaus are. We call it the baseline report. In other words, what is the latest current reports? So, when a person signs up for this program, they are, first of all, called immediately by the attorney. He talks to every single client, and then he pulls your credit reports, off all 3 bureaus.

Based off those credit reports, Mitch, he immediately produces dispute letters, sends them out. Most people have them within just a few days. They’re already stamped, addressed, ready, all you do is have, what we call “a signing party”. You sit down and you sign them all, lick them, and drop them in the mail. Two to three weeks later, you’re going to get the responses from the bureaus. He wants to see will they make a change, or, if they haven’t, what is your current report.

Now, when you get those back, you just fax or email them to the attorney. Now the magic happens. This where he starts to apply his specialized knowledge. He’s done with the credit bureaus. They’re not going to help you at all, and he knows it.

So, what he does then, is he goes after the creditors. So, he submits a demand letter, or a demand — we call it “a kit” — to these individual creditors on your report, and says, “I am representing this individual. Under the Fair Credit Consumers Reporting Act,…” which is the federal law that protects your rights as a consumer, by the way, “we are demanding the following items to verify this debt.” So, there’s a very strict formula that he goes down through. And, he tells the creditor, “You must produce this under the federal law, all of this information to verify this debt under these 3 topics. And, if you do not, the federal law applies a penalty to you.” They have to pay a fine, if they don’t do this.

Of course, the kit — the letter says, “By the way, if you would like to simply delete this record from my client’s 3 bureaus, that’s acceptable, also.” Now, you take a creditor that gets a demand letter from a law firm that knows what they’re talking about, is quoting the federal law that they have to comply with, they’re going to pay attention to it. Right, Mitch?

Mitch: Well, I’m guessing that these people have heard from him before, and they probably know who he is and they know what he’s capable of. Am I correct?

Dave: It’s called a “velvet hammer”. The implication of a “velvet hammer”. [LAUGHTER] It’s just a, “Hey, here’s what we need. Give it to us, or else.” And, they don’t want the “else”, because, if they don’t, these are stiff fines that they have to pay.

So, in a lot of cases, it’s just simpler for the creditor to delete the account from his client’s 3 bureaus. Now, not all of them will do that. Everybody’s case is unique. We can’t make guarantees based on that. But, I did say, on the average, what you anticipate that most creditors will comply. And, he says, on average, 65% to 75% of creditors take the cheap way out and just delete it. They do not wanna go through and spend the employee time pulling all the records together and providing them.

Here’s the other interesting thing. Most creditors, Mitch, don’t even have the records. Because, think of all the mergers, and acquisitions, and bankruptcies, and everything that went through the corporate world during the recession. Most creditors cannot produce the original signed note that’s demanded in the letter. If they can’t produce it, their claim is not valid and they have to delete it.

So, in most cases — or, even if they have the record, they’re stored in some warehouse inside some bankers box, they don’t even know where they’re at. So, even if they could comply, they can’t, because they can’t lay their hands on the records. And, that’s why he’s successful. He uses the law, and what the law demands to protect your rights, he makes the creditor comply. And, if they can’t comply, by law, remove the record from your credit bureaus.

All of this happens in 90 days or less. And, that individual’s credit can then improve. Again, we can’t guarantee how much, but I’ve seen some pretty dramatic improvement from a lot of our clients.

Mitch: So, for once, we have this bureaucracy that’s working against us, because of all the 1,000s and 100s of thousands of letters being sent — disputes — working against us. Now, we’ve found a way to flip this around. He’s found a way to flip this around, and use this bureaucracy, and this red tape, and this overwhelming workload against the companies and demand that they produce what he needs by law to have. And, does he threaten a lawsuit, if they don’t?

Dave: He doesn’t have to, because the federal law applies the fine. It’s already been decided by federal law. See, the direct creditor challenge is the unique feature that he uses that gets you out of the rest of the herd that’s just sending letters to the bureaus, hoping they make changes. He protects you with that federal law, and that federal law is the hammer. So, he doesn’t have to take them to court. If they don’t produce, he has proof they don’t produce, by default, they pay. If they don’t pay, they’re in some serious hurt with the federal government. And, they can’t go — they won’t go there.

Mitch: Ultimately, he could file a law suit, if they just didn’t conform, right? Is that right or wrong?

Dave: Absolutely. No, no, absolutely, he can file a lawsuit.

Mitch: But, they’re smart enough to say, “You know, just let it go.” Or, go get the stuff. Now, the onus is on them, instead of us having to wade through all this bureaucracy and red tape. It puts it back on them. They don’t produce it, they have to let it go. If they don’t let it go, he, I guess, can file a lawsuit. Is that right?

Dave: Yeah, he certainly can.

Mitch: And, if he files a lawsuit, he’s going to automatically win, because he’s got proof they didn’t conform. I mean, it’s really not much of a lawsuit, right? It’s kind of won before it even starts.

Dave: It’s never going to get to a lawsuit. Because they didn’t conform to federal law, he’s got the proof, federal law defaults, a fine is issued. They have no choice. See, all U.S. creditors are subject to this law. Every U.S. creditor is. So, that’s why late payments, collections, repossession, foreclosures and he even gets bankruptcies removed, in some cases, because they cannot comply with this record keeping that’s demanded under the federal law.

It’s nice to know that a federal law actually works to protect your rights when it’s applied properly. And, he knows exactly how to do that. And, it doesn’t take long with his system, 90 days or less, it’s taken care of. And, it works.

Now, we can’t guarantee results. Everybody is unique. But, I’ll tell you what, he backs it up, we back it up, we — because we’re results driven — we don’t waste any time with the bureaus. We go directly after the creditors. We, meaning the attorney and his team. And, they have to respond. The clock is ticking on them, when he submits the kit to them. They can’t dawdle and take the time. The clock is ticking, and they have to respond by law within a certain period of time, Mitch.

Mitch: It’s a whole different ball game, between when you send the letter and when an attorney sends in a letter with specific demands as the law requires. It’s a whole different ball game, I’m thinking. And, I want to ask you this one question. Does – I think I heard of this guy — does he ride a white horse and have a cape and yells, “Hi-ho, Silver”, or anything? Because, I think I’ve heard of this guy.

Dave: That’s actually his brother. This guys has a red cape with an “S” on it.

Mitch: [LAUGHTER] And, for once, it’s nice to have a guy on your side that can shoot the silver bullet, you know? Who knows if he’s going to hit exactly where he’s supposed to hit, but it’s nice to know that we’ve got this kind of guy on our side.

How long has he been in business, again?

Dave: Over 20 years, now. Over 20 years, now. In fact, he backs this up with a 100% guarantee, period. So, the rules of the guarantee are simple. There’s three rules. One, when you get the dispute letters from him, you mail them promptly to the bureaus. Two, you have to keep making your payments on your accounts. This isn’t the time to stop making payments, go out get a new credit cards. You don’t make any changes. You stay put, you hold your breath for 90 days or less. Okay? And, you don’t make any changes, because this will upset what’s going on.

And, as long as you do that, he guarantees to improve your credit. If he doesn’t, for some reason, wasn’t able to improve your credit, he will refund 100% of every penny you pay, no questions asked. He’s done that guarantee since the day he went into business. And, I asked him, I said, “So, how many times have you had to pay that?” He said, “I haven’t paid it once. I always improve the credit, always.”

And, he says, “If I’ve got to put extra time, it don’t matter. I will make it happen.” Because, he knows that what you need to have done affects your life and determines whether or not you could move forward with your plans. And, to him, that’s very personal, and he wants to remove this log jam, get it out of the way, so you should go on, on you journey. And, so, I really thoroughly enjoy him from an ethics and how he does things so honestly. And, he is so fast. It’s wonderful.

Mitch: Well, it sounds like the kind of muscle that you would need. And, I want to just clear — we’re straight shooters here. Like you said, every case is individual. You can’t say how much that they’re going to improve it, but it sounds like, to me, from a personal standpoint — I’ve had problems with my credit, as far as, not that I don’t pay my bills, I have problems with people with putting stuff with my credit that doesn’t belong there.

And so, to me, especially after learning from you how much my credit affects my entire life, it’s a no-brainer to sign up for this thing, and make sure that I have someone watching after me, and taking care of me. Certainly this can’t go under perpetuity, but how long — Does he monitor your credit for a certain period of time? or is it a one time deal? Is he with you there for years, or how long is he with you, or how long does the relationship last?

Dave: Well, what we do is we give people — we teach people to give them the tools, so that they can do some of this themselves. In other words, we show them every year, pull your credit reports, alright? Go through the reports. We’ll give them a report to understand how to read the codes and everything. Look for any of that garbage you mentioned that showed up on your report that shouldn’t be there.

If there’s anything that you don’t like, he further backs up his work with a 2 year performance guarantee. It basically says, if you see something a year or 2 from now that you don’t like on your bureau or whatever, get him the reports and he’ll do a consultation with you. In most cases, he can tell you exactly just do this, this and this and that’ll clear it up. If you needed him to take action, well, that would be an additional fee between you and him, but he keeps it very reasonable.

So, he just doesn’t do it once and abandon you, because this is something you need to understand; how to do it yourself, and then turn to a professional like him, if there’s something you can’t fix that might pop up later on. So, you’re right, Mitch. This is an ongoing process, because that is you in 3 digits on a piece of paper, and you’ve got to protect and make sure that it represents you fairly.

Mitch: You know, one of the things that happened to me, and this is my personal case, I had some medical issues. And, you know how insurances is now. If you walk into a doctor’s office, and they said, “Well, you know, that visit was a 150 bucks.” I say, “Well, I have insurance.” They say, “Okay, well…”, but they don’t say that. When you hand them the insurance card, say, “How much was this?” They say, “We don’t know. We’ve got to check with whatever.” They never give you an answer on how much it costs for the visit, if you hand them the insurance card. It’s very frustrating for me.

And so, I’m was getting medical bills that I knew that I paid already. I knew I paid them. And, what happens is they sell their accounts receivable, like I think they fell in the factoring. It seems to me like the hospital will sell these things like factoring. They’ll sell their accounts receivable for cash today, and they turn it over to some collection company. And, I keep telling the collection company, “Hey, I already paid this.” You even send them the check, or a copy of it, and they’re still calling you three months later, and they haven’t taken off your credit report.

And, it really infuriated me. And, I just got to the point where I had thrown my hands up, and decided that I could spend hours and hours and hours, trying to solve this issue, or I could just ignore these calls, absorb the hit on my credit, and go out buy another house and make 20 grand.

You know, no one’s paying me 20 grand to solve my credit issues. So, I have a choice of what my hours to do every day is. Do I spend a whole day, or 3 days, or 5 days, or a month getting to the bottom of this? Or, do I just go out and make an extra 20 grand and say, “Well, life’s just not fair.”

And, what I like about this is I don’t have to do that anymore. I can go out, make my $20,000 a house, or whatever deal I’m working on, and I can turn this over to him for what is a very reasonable fee, I’ve gotta say. Very reasonable, given the fact of how much it affects you.

And, I don’t have to worry about it anymore. I have very few things to do. I just have to send in the three requirements’ sending those things, and not mess up my credit anymore. I found it a great comfort, myself. I think that we’re going to have a link — well, I know we’re going to have a link here, so you can hook up with David, and he’ll get you hooked up with his program. Right?

Dave: Yeah, we’ll have a link, and then, all people will have to do is click the link and just enter some basic information and just have a free consultation. I’ll visit with you for a few minutes, answer your questions and get you an idea of how this might work for you. And, if it is, then we’ll go ahead and put you in the program so the attorney can immediately get a hold of you and start you through the program.

This is for you, your family members, friends. It’s for the buyers of your houses. This is for everybody. But, you know, that’s your decision as to if this is the right resource.

Just the other day, I had a close friend that got a hold of me. Well, actually, I hadn’t talked to him in quite a while, and I was talking about things. And, he just mentioned that he trying to buy a house, and didn’t get approved. And, I said, “Ah, so, you’ve got a few dings.” He said, “Yeah, I didn’t even know I had the dings.” He was shocked.

And, he was in the low 600s, low 600’s. So, I hooked him up immediately with the attorney. And, I just got an email from him a few days ago. He said, “Dave, all three bureaus are over 700 and rising.” He is thrilled. He is applying for his mortgage, I think, in the next week or two.

So, you know, I know the program works. Think of it, Mitch, it’s just like — some people try to do their taxes alone, and they may do an okay job with an online service or whatever. But, most of us realize the value of having a real pro, whether it comes to taxes or accounting or legal work.

Well, this is the same thing. This is a legal pro that’s going to protect the most important asset we own, which is our credit scores. And, he know what to do, he knows how to do it, and he’s going to share information on how to keep yourself back — get yourself back on track and keep yourself there. And, it’s just a part of managing your financial life, so you could be as successful as you want to be.

Mitch: You know, Dave, I’m really glad that we had this conversation. I’m sure there is more than just a few people that have experienced the same kinda things that we’ve talked about. And, I want to thank you for being on this call. I mean, I don’t want to cut it short, but, if there’s anything else that we need to talk about, then feel free to jump right in. But, if this is pretty much the synopsis, then let’s call it a day.

But, I really appreciate you being here, because this is a super tremendous tool in my toolbox to help keep my business and my life running the way it’s supposed to run. And, I just really appreciate you for taking the time and going through in figuring out a solution for all of us who just don’t know how to — where to even start. And, I know for a fact that this came out of a personal situation for you, and that you were infuriated. I’m just glad that you got to the bottom of it, and that we have some place to go now. I really appreciate you, Dave. Thanks for being on the call.

Dave: My pleasure. And, I hope I can help everyone possible. Thanks, Mitch.

Mitch: Thanks, Dave.

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