25 expert articles across 8 modules — extracted directly from the Credit Action Plan Masterclass Challenge course.
A credit report is the complete record of a client's credit history -- the starting point for every Credit Action Plan. It shows what is helping and hurting their score, and it drives every dispute and strategy decision.
FICO is used by most lenders for major credit decisions (mortgages, auto loans). VantageScore is used more often for credit monitoring and some credit card approvals. The model that matters most depends on what your client is applying for.
The FHFA is moving mortgage underwriting from the old FICO 2/4/5 models to FICO 10T and VantageScore 4.0. This means trended data and rent payment history will now matter for mortgage qualification.
The five FICO pillars are Payment History (35%), Amounts Owed (30%), Length of Credit History (15%), Credit Mix (10%), and New Credit (10%). Payment history and utilization together make up 65% of the score.
FICO 10T looks at 24 months of credit behavior, not just the current snapshot. Clients who consistently pay down balances are rewarded; those who carry revolving balances month to month may be penalized even if their current utilization looks good.
Keep utilization below 30% overall and on each individual card. For maximum score optimization, target 6-20%. Utilization is the fastest factor to improve -- it responds within one billing cycle.
Protect old accounts -- never close the oldest credit card. If a client has thin credit history, becoming an authorized user on a family member's old, well-managed account is the fastest way to add history.
A charge-off is when a creditor writes off a debt as a loss after 180 days of non-payment. A collection is when that debt is sold to a collection agency. Both are negative items, and one debt can create two negative entries on the credit report.
Pay for Delete is a negotiation strategy where you agree to pay a collection account in exchange for the collection agency removing it from the credit report entirely. Get the agreement in writing before making any payment.
Debt validation is a consumer right under the FDCPA that allows a client to demand proof that a debt is valid within 30 days of first contact from a collector. If the collector cannot validate, they must stop collection activity and the item may be removed.
It depends on the scoring model the lender uses, whether Pay for Delete is available, and how old the debt is. Under FICO 8, paying does not remove the item. Under FICO 9/10 and VantageScore, paying helps. Always check the statute of limitations before paying.
Federal student loans default after 270 days of non-payment. Look for account status showing 'Default' or 'Charged Off,' multiple 90+ day late payment notations, and entries from the Department of Education or a guaranty agency.
Rehabilitation removes the default notation from the credit report after 9 months of on-time payments -- consolidation does not. Rehabilitation is almost always the better choice if removing the default notation is the priority.
The four main income-driven repayment plans are SAVE (formerly REPAYE), PAYE, IBR, and ICR. All cap monthly payments at a percentage of discretionary income and offer forgiveness after 20-25 years (or 10 years under PSLF).
Chapter 7 bankruptcy stays for 10 years; Chapter 13 stays for 7 years. Credit rebuilding can and should begin immediately after discharge -- do not wait.
Common post-bankruptcy errors include accounts still showing balances, accounts showing 'charged off' instead of 'included in bankruptcy,' and discharged accounts still appearing as active collections. Dispute with the discharge order as supporting documentation.
The FCRA is the federal law that regulates how credit information is collected, used, and shared. It gives consumers the right to dispute inaccurate information, access their credit reports for free, and sue for damages when their rights are violated.
The most common FCRA violations include re-aged debts, duplicate accounts, accounts not removed after bankruptcy, continued reporting after a successful dispute, and failure to mark disputed accounts. Each violation can be worth $100-$1,000 in statutory damages.
When you identify FCRA violations in a client's credit report, you can refer them to a consumer protection attorney who handles cases on contingency. The attorney collects from the defendant -- the client pays nothing. You earn a referral fee.
A Credit Action Plan is a personalized, strategic roadmap for improving a client's credit profile. It is not a generic dispute letter service -- it is a customized plan based on the client's specific credit report, goals, and timeline.
Pull reports from AnnualCreditReport.com, categorize all negative items, prioritize by score impact, create a dispute strategy, build a utilization paydown plan, and set a realistic timeline with monthly milestones.
Credit Butterfly software imports credit reports, auto-identifies negative items, generates FCRA-compliant dispute letters, tracks dispute timelines and deadlines, sends automated client updates, and flags potential FCRA violations for attorney referral.
Document the error, write a specific dispute letter with supporting documentation, send to the bureau via certified mail, also dispute with the furnisher directly, track the 30-day deadline, and follow up on the outcome.
The biggest myths are that disputing everything works, paying a collection removes it, credit repair companies can remove accurate negative information, closing cards improves credit, and checking your own credit hurts your score. None of these are true.
The Fair Debt Collection Practices Act (FDCPA) regulates how debt collectors can contact consumers. It prohibits harassment, abusive practices, and deceptive tactics. Violations can result in up to $1,000 in statutory damages per violation.