Steve Bucci doesn't believe in quick credit fixes. The author of
"Credit Repair Kit for Dummies
sees our credit histories as carefully woven tapestries created
over a lifetime. Credit is something that, if left ignored, can't
be slapped together at the last minute when you need it most --
such as when it's time to apply for a car loan or a mortgage.
Bucci preaches that your credit has to be built from the bottom
up -- and can't be fixed from the top down. There's no a magic
wand, no credit repair fairy. And rebuilding a damaged credit file
requires taking the right steps over time.
The fourth edition of "Credit Repair Kit for Dummies" was
released March 24. CreditCards.com talked with Bucci about common
credit repair misconceptions and the best ways to improve your
Q: What do you see as good or bad about our current credit
A: I think the current system is great! You have to understand
what was there before to understand how good it is now.
Credit now is almost completely nondiscriminatory. It's fast and
efficient. The current system is not perfect by any means, but it's
a vast improvement over the old days, when [a lender] could
arbitrarily say, "We don't lend to women with tattoos," or some
The difficult part of this system is that it can seem overly
complex to consumers, primarily because they have no education on
it. The first thing they know is that they have a problem, and they
hit a wall of ignorance.
Another frustration is that the bureaus can act so
Maybe the worst part of this system is that so many young people
get credit advice from their peers, and their peers don't have a
Q: How important is it that a person repairs his or her
credit? Should people worry about their credit even if they don't
think they are applying for a loan anytime soon?
A: If you have credit that needs repairing, it's essential that
you address it sooner rather than later. It will mess up your life
for a long period of time. Bad credit has gone way beyond lending.
It's about the fabric of life.
Credit is now used as a proxy for any number of behavioral or
decision-making processes. If you're looking for a job and your
credit is not good, it may significantly reduce your
Credit affects buying insurance. The insurance companies,
including homeowners and auto insurance companies, look at your
credit reports. They score them and decide whether they will
[issue] you [a policy] and how much they will charge. There is a
proven link between creditworthiness and insurance risk.
It's difficult to buy a home with bad credit, but it's also hard
to rent a place. They may make you put down a larger deposit.
A bad credit report could affect you in love. A lot of people
today will say, "Sweetheart, before we commit to this relationship,
I'd like to see your credit report." I've seen relationships break
up over what's in a person's credit report.
Q: Have you heard any myths or misconceptions about credit
A: The main one that keeps popping up is that negative
information that is accurate and timely can somehow be erased form
your credit report if only you pay enough money. They can just make
it disappear. They cannot.
Q: Do you recommend paying someone to help you rebuild
A: I have done coaching in the past, and that has worked out
well. Credit repair is a long-term systematic solution. It can be
very valuable. Paying someone for a quick fix, I don't recommend.
If your life is out of control, so will be your credit.
I was working with someone who has a very good income whose
credit was trashed. She wanted to buy a house and didn't know how
to go about it. I suggested getting rid of her love interest, who
was using her credit cards, living in the house and not paying
rent, and so on. There was no one else to tell the person to do
that, and I did. I told her how to get new credit cards and rebuild
her financial life.
In about a year, she bought a new house. It was a coaching job,
not a credit repair job.
Q: So many people have foreclosures and short sales. What
can they do about the damage to their credit?
A: Let's look at this in two parts: Before you lose your home,
and after you lose it.
Before you lose your home: Foreclosures don't happen overnight.
You get some warning. There are a number of things you can do. If
you're in trouble, you need to act, and act quickly. Begin with a
HUD-approved mortgage counselor. Don't get your brother-in-law.
is really good at [helping distressed homeowners]. They're a
national group, they're online, and they're free. The best ones are
free. You can also go to
If you cannot avoid foreclosure, start rebuilding [your credit]
at once, when you see it coming. Open new lines of credit, personal
loans -- just small ones -- before you default. That allows you to
add positive data to your credit. This offsets negative data from
the foreclosure more quickly. You're going to have a lot less
access to credit after the foreclosure.
After foreclosure: If you can't start early, start small. The
key is to get new, positive data flowing into your credit reports
as soon as possible. If you can avoid having the lender suffer a
loss in the foreclosure process, your credit will not suffer as
much of a loss.
Q: Some people say a foreclosure can be worse than bankruptcy
for your credit. Is that true?
A: It depends on your goals. If your goal is to buy a house, a
foreclosure is worse than a bankruptcy. It's hard to get actual
numbers for these things. Someone who has bad credit to start with
loses less ground than someone who has good credit.
If you have a good credit score, you could lose in the vicinity
of 100 points. If it's lower, you could lose 50.
Q: How do tightened credit markets affect people with
so-so or bad credit?
A: They have a different effect. It used to be a matter of
price. If you had bad credit, they would charge you more, or you'd
need a bigger down payment. It's no longer about price. It's about
risk. We're living in a risk-averse world. Credit was tremendously
loose, then it was tight. Now, it's beginning to loosen up.
Still the equation is more risk driven. Before the mortgage
meltdown, if you were breathing, you could get a loan. It's almost
like science fiction the things that have changed since that
Q: What's the No. 1 thing you wish people knew about
credit and credit repair?
A: The credit/life connection is really strong in how I look at
credit. If people realize their credit and their lives have a
relationship, it helps them understand it better.
I help people understand how credit works by giving them
examples in nature. For example, I refer to bankruptcy as
clear-cutting your credit. All the trees are all gone. You start
all over from zero.
View credit as part of your life as an ecosystem. Negative
information in your credit is like pollution in a pond. The more
pollution, the longer it takes to get back to a solid ecosystem.
People need to know that you can only repair credit by rebuilding
it line by line.
How to fix your bad credit rating
How to fix surprise credit report errors
How foreclosures, short sales, other mortgage
defaults affect credit