This is Jeff Rose, Good Financial Cents and
soldieroffinance.com with another awesome
interview with another awesome guest. My guest
today is Phil Tirone who is what I would call
a credit score expert master ninja; call it
what you will. I’m a financial planner, and
I help a lot of people with investing and
financial planning, but when it comes to credit
scores I am basically, for lack of a better
term, ignorant. I actually had a blog post
that I wrote about my experience trying to
find my true credit score, and I was amazed
at all the dead ends I ran into. Luckily,
Phil here was able to shed some light on that
situation and help me along. I just want to
introduce Phil today as being that credit
score expert and for any of you that are in
the same situation I’m in trying to understand
your credit, hopefully we can learn a lot
by Phil’s expertise today.
JEFF: Phil, how are you doing today?
PHIL: Great! I’m doing great, Jeff. Thanks
for having me.
JEFF: Okay, I first want to just kick it off
and for those that really don’t know you,
first introduce yourself, how you stumbled
upon your own credit score or credit past
and what that has got you today.
PHIL: Yeah, well it all started in the late
90s. I walked into a bank one day and I was
depositing a check. The teller said to me,
“Mr. Tirone, you’re overdrawn in your checking
account.” It’s embarrassing to hear, okay
and gee, I just didn’t really know where to
go with it. She said, “But you know, Mr. Tirone,
you can apply for overdraft protection, $100
overdraft protection line. We approve everybody.”
I’m like sure, do it. So she ran my credit
and she said, “I’m sorry, we can’t approve
you. Your credit score is too low.” I’m thinking
to myself whoa! The first thing was embarrassing.
This is really embarrassing! The thing is
Jeff, I knew how important a credit score
was. I was in the mortgage business at the
time. I did loans for people. I saw how they
overpaid based on their credit score. At that
moment I looked at my credit score and I said
gosh, what am I overpaying on my mortgage?
I looked at it and if I raised my credit score
to, at that time it was 720, I could refinance
my home and save somewhere between $500-600
a month. It’s just staggering. I said I’m
going to figure this out. I bought every book
I could. I called the credit bureaus. I called
my credit card companies. I called the banks.
I tried to get as much information as I can.
Just like you said, there’s road block after
road block after road block and what I learned
after doing this for long is it’s such a conflict
of interest of what’s going on here, okay.
You go to your bank and ask how to raise your
credit score, they’re not going to tell you,
okay. They don’t educate their people, I should
say. I don’t believe maliciously they’re trying
to hold back information, but I know they
don’t aggressively educate the people on how
to raise their credit score because it impacts
their profitability. You finance, you get
lower interest rates, etc. etc. Long story
short, after going to the banks and using
my credit as the guinea pig I really figured
out how to raise a credit score and it’s not
hard at all. I came out with a book. I used
it as a business card to get more loan business.
I said hey, I’ll help you raise your credit
score and then do the loan with me. That’s
how it started and now I focus on credit all
the time.
JEFF: Wow! That’s cool. You just mentioned
with the banks and a lot of the mortgage lenders
out there, and I think you had a video where
you actually went into a bank and asked a
bank lender some questions about a credit
score. I’ll have a link to that video because
I think it is cool because that lender really
didn’t know anything and he tried to fill
in some gaps with basically some information
that was completely wrong. It’s funny because
I had a very similar experience with my own
mortgage lender here in the area when we were
going to build our first home. I asked him
some questions regarding credit score and
he really had no clue. He tried to pretend
that he knew what he was talking about. I
don’t think it was done maliciously, but I
just think that the information is not easily
found out there.
PHIL: Without a question. I took that spy
camera into four different banks. Four different
banks said basically all different information.
I know what impacts a credit score now. I
look at tens of thousands of credit reports.
I know. These poor guys are just clueless.
Like I said, it’s not their fault. They are
trying to do their job. The banks don’t educate
them. I’ve put together a whole program and
sent it to executives at banks and said, “Hey,
look at what you could do for your clients.”
I get crickets then I realized. One thing
about me, Jeff, I’m a little slow. Sometimes
it takes me a little bit to figure it out.
Then I realized oh, I got it. Why would they
do it? There is just that disconnect, which
is what it is and that’s why I’m convinced
we need to educate the American people on
how to step up for themselves or else their
bank is just going to rob them. It is literally
a form of legal robbery. In my opinion it’s
how banks legally rob. It’s completely unfair
and absolutely reform is needed, but it is
what it is. You’re dealing with a huge bureaucratic
political beast that I’ve tried to change.
I’ve offered to give books away to everyone.
I wrote the president when he got into office
because he was big into the entrepreneur.
He said the entrepreneur is going to save
us. He still probably is; I just didn’t hear
back from him. I wrote him and I said, “Mr.
President, I’ve got the way to save hundreds
of dollars a month.” I mean, 80% of Americans,
80 8-0, have an error on their credit report.
If we just solve those errors, the average
person will save hundreds a month. Just solve
the errors, forget everything else. I said
I would give my book away to anyone. We’ll
create digital programs. We’ll just get it
out to the masses. But the idea wasn’t good
enough, I don’t know why. I thought it was
a good idea, but whatever.
JEFF: You sent me a copy of your book and
some of your manuals and one thing you just
mentioned was 80% of the US population having
an error on their credit report and how much
that could save them if they just realized
that. What are some other common things- all
the programs that you’ve gone through, all
the people you’ve helped over the years- what
are some quick fixes that a lot of people
don’t realize that they can implement right
away?
PHIL: Well, first of all you need 3-5 credit
cards. You absolutely need 3-5 credit cards.
There are people that say I only have one
and that’s all I need. Here’s the problem
with it; credit is about building roots, deep,
deep, deep roots. If you don’t have deep roots
when one of those errors come on your credit
report, it’s going to drop your score much
farther than it should. That’s why you need
three to five credit cards. There’s a caveat
here. There are some credit cards that help
your credit scores and some credit cards that
hurt your credit scores. I’ll explain that
in just a second. If you just go out and get
a credit card, that could have no impact on
your credit score or could be having a negative
impact on your credit score. You need to know
which credit cards are the right credit cards
to get. I can give you that link and we can
put it on the blog post. We have gone through
sites so we know which credit cards we recommend
to our clients and which ones we don’t. If
you just go to creditcards.com and you pick
whatever credit card, that could have a negative
impact. Let me explain why. The problem with
credit cards is they don’t all report the
proper information. Here’s why they don’t
all report the proper information: according
to the credit bureaus, credit card companies
don’t have to report information to credit
bureaus. They chose to do it. When they chose
to do it, they have to pay to report. The
credit card companies or your banks and stuff
like that pay to report to the bureaus. Because
of that, they report certain information.
The bureaus are just a reporting agency. They
just report what they report. One of the things
we talk about in our book, and this comes
from a Federal Reserve board study, 46% of
the credit cards that you have in your wallet
do not report the proper credit limits to
the bureaus. Just think about that. Forty-six
percent do not report the proper credit limits
to the bureaus and here is the problem with
that. Assume you have a $1000 credit limit
and every month you pay your electricity bill
on it that’s $100. If the credit card company
is not reporting the proper limiting and many
times they report a 0 limit, when your credit
report is run by your mortgage bank, your
credit card company, your ________ business
or even your insurance company or your future
employer, the algorithm of the credit scoring
system looks at your credit limit compared
to your balance. So on that limit that should
be $1000 limit, $100 bill. That’s a 10% utilization.
But if the credit limit is not being shown
and it’s showing 0 credit limit and $100 balance,
that’s negative utilization. You’re maxed
out. That could have a 10, 20, 30 point impact
on your credit score depending on what other
stuff you have. Help me out here, are you
kidding me? That just makes no sense. That’s
the thing, I’m a real common sense type guy.
That’s just how I operate. There’s certain
things that are just unfair and that is unfair
because nobody knows this. They think to themselves
are you kidding me? How could this possibly
be real? This is the way it works.
JEFF: I was one of those that had no idea.
I’ve heard about the utilization ratio and
I get that aspect of it, but I had no idea
about the reporting of the limits and the
error of the limits. It makes a lot of sense
why it could hurt somebody score, but it doesn’t
make a lot of sense why that’s the way it
is.
PHIL: Jeff, it makes no sense. That’s why
I have people that sign up for my program.
We’ve had some people that have 100-120 point
impacts in 30 days. Literally, they have 100-120
point swing in their credit report in 30 days
and it’s because they have two or three credit
cards that aren’t reporting the proper limits.
It just drives me crazy. Here’s the hard part
about that. When they don’t report the proper
limit, it impacts your credit score which
has a direct impact on how much you are going
to over pay each and every month. Like I said
it impacts obviously your mortgage. If you
had two brothers buying the same exact house,
same exact location, same street, same everything.
They have the same income, same debt, but
one has a 720 credit score and one has a 719
credit score and they are buying a $300,000
home with an FHA. The one with the 719 credit
score, assuming he is going to put 10% down
and he needs mortgage insurance, is going
to overpay $4500 in fees because of that one
point. One point! So it impacts your mortgage.
It impacts your car. It impacts your credit
cards. It impacts any other loans you have.
It impacts your car insurance, your home insurance
in certain states. It impacts whether you’re
going to get a job. Inc. Magazine came out
and said that 61% of employers are running
a credit report before they hire you. I really
think this is the lowest ________ for anyone
in the financial world. I just can’t be more
passionate about it. I guess sometimes I feel
like I’m up on top of the mountain singing
or yelling and no one is hearing. You would
think that you get this information to the
right politicians laws would be changed. I’m
just waiting for you to run for office.
JEFF: That’s great. For my audience and for
everybody that watches this, that little nugget
is worth hundreds a month, could be thousands
a year. Over the course of their life time
that’s huge.
PHIL: I have tons of them. So let me tell
you this. Everyone…. Well I don’t want to
say everyone, but the majority of people,
75-80% of people have some type of collection
on their credit report. It’s not because you
didn’t pay your bills. I recently moved to
Scottsdale from California. I sent in a change
of address form to the water service company
in LA. They wrote down the wrong address.
So what happen is I didn’t know I had this
$500 bill for water and they sent me to collections.
I get the collection letter. Thank God I know
how to handle this stuff because, guess what,
that one collection would have impacted my
credit score 50, 60, 70 points. The thing
is, one of the things we talk about in the
program is make sure you negotiate before
you pay any bill in collections. That’s
what I did with this collection company. What
we do is take people through a process of
validating their debt and then negotiating.
What happens with these collection companies
is they sell so many different times. So this
company sells to this company and this company
sells to this company. Many times the information
gets skewed and lost. We need them to validate
the debt so we can get the information from
the collection company so we know they have
my wrong phone number, they have my wrong
address. They have all this wrong stuff. Then
we come from a power of negotiation. In my
course, the 14-day credit challenge, we talk
about all this information. We give the actual
letters to send for the credit limits, for
the bureaus, for the collections companies,
all that stuff so that you are put in control.
The reality, no one teaches this information.
You can’t go to your bank like we said. You
can’t go anywhere. You have to find creditable
sources. The sad thing is if you go to the
books in the books store, we printed a book
and the problem is we just kept going out
of date. It wasn’t relevant. Now we keep everything
on line and basically with the 14-day credit
challenge we send people an email once a week.
It’s once a week for 14 weeks. We call it
14 days because we send you one video per
day for 14 weeks. The videos are 5-10 minutes
long. It gives you exactly the nugget you
need to learn and then it gives you 5-10 minutes
of things you need to do if this applies to
you. At most a person is spending 20 minutes
a week, at most 20 minutes a week, to learn
about their credit. In most cases, 8-10 of
the weeks are applicable. For this, Jeff,
we have a free webinar that we can put on
your blog post where people can hear. I literally
give a 55-minute webinar explaining our challenge
and they can sign up for it. We have the webinars
once everyone’s there.
JEFF: Okay, we’ll definitely have that information
for our viewers. Can you maybe share a success
story of someone that has gone through it
here pretty recently that maybe seems like
a minor thing but made such a big impact on
their life now that they understand their
credit?
PHIL: I have so many success stories. I don’t
even know where to begin. ________ from Indianapolis,
Indiana was bankrupt and divorced and never
thought he would be financially free. He was
in a rough space. One of the things we talk
about is I don’t care if you had a bankruptcy
yesterday, I can get your credit score over
720, over 750, 8-9 years before that bankruptcy
falls off your credit report. Think about
that. You had a bankruptcy, you can have your
credit score up 700, 720, 750, 8-9 years before
that bankruptcy falls off your credit report.
My belief system is a lot different from typical
credit repair companies. Credit repair companies
typically say hey, Jeff, you have that problem
with that Ford account. Let me get that off.
I know someone at Ford. You’re subject to
their relationship getting an error off your
credit report. If that error doesn’t come
of your credit report or that negative mark,
than you can’t recover. I believe completely
different. According to the FCC or according
to the federal laws, if something happened
to your credit report, it happened. You can’t
get it off legally. I don’t want to break
any laws. That’s just not my gig. What I teach
people how to do is build their credit around
those issues so it doesn’t matter. Your bank
wants you to think if you had a bankruptcy
you’re out to lunch for 10 years. Good luck.
That’s not the case. ________ got our program.
He went from 540, if I recall, 540 to 735.
This is with the bankruptcy on his credit
report. I have another example. _________,
executive from Sony. I did all her loans.
She called me one day and she said, “Phil,
I have a problem. Something is going on with
my credit report.” We ran her credit report
and there was one error. She always had 750+
credit scores. One error on her credit report
that had caused something like 750-580. It
was a huge, huge drop. One error. It took
us months to get that thing off. When we got
it off her credit score just popped and she
was able to refinance. The reason why she
realized her credit score was low is because
she was refinancing a certain debt like her
car and different stuff like that. She was
forced to get into things that she couldn’t
afford. When you have a 580 credit score and
you’re getting a car, you’re paying like crazy.
One of the other reasons why was her other
loans. She was doing investment property so
she had to do a 1031 exchange. She had to
get another mortgage loan with that credit
score really high. She ended up saving when
she refinanced those two things $900 a month.
It was just staggering. I talked to a guy
in Ottawa last week on the cell and he said,
“Phil my score went from 620 to 732 in 30
days.” If you know the information it works.
JEFF: Wow! That’s great. I think for anyone
that has that situation where they have a
low credit score and have nowhere to go, your
program is one of the few I’ve seen out there
that will actually educate them and walk them
through it. You have some pretty bold claims
on your site, but what it sounds like is that
you also have some case studies to back that
up as well. That’s great.
PHIL: Oh yeah. It works. I know it works.
A matter of fact my guarantee if you don’t
save a $1000 the first year you can have all
your money back. That’s my guarantee. The
credit guarantee is if your credit score isn’t
where you want it to be in a year, you can
have all your money back. That’s how confident
I am. I just know because we’ve had over 10,000
people go through our program. Because we’ve
had that many people I just understand how
the system works so well and that’s what’s
happening. I’m pretty confident about it and
grateful to be able to tell the story.
JEFF: That’s great. We’re also going to have
links to Phil’s blog here. I know he’s got
a lot of great resources there. I’ll also
have a link to the webinar. Basically the
link then is just to show them the next available
live webinar that they can attend?
PHIL: Yeah, basically they sign up for the
webinar and they’ll be invited to the webinar
whenever the times are and stuff like that.
It’s all on the website.
JEFF: I think also too if you will agree to
this, I might have some readers regarding
their credit score. Maybe we can post those
as well and get those answered on the blog
post here just to really, really show people
how much they do need to go through your program
to boost their credit score and what not.
PHIL: Whatever I can do, Jeff, to support
you. I love what you’re doing. I love your
information and as I’ve told you I can’t wait
for you to come out with your product. After
people finish the credit scoring process they
need a financial education process, and there
is one person I’m turning to and that’s you.
I love your blog. I love what you’re doing.
I love your book. I want to support you anyway
I can.
JEFF: Just so everybody knows, I did not pay
Phil to say that. That was completely unsolicited.
Phil, I appreciate your time here and I definitely
appreciate the nuggets of information. I actually
learned a lot today and I’m sure a lot of
people did too. I appreciate it.
PHIL: Talk to you soon.
The opinions voiced in this material are for
general information only and are not intended
to provide specific advice or recommendations
for any individual. To determine which investment(s)
may be appropriate for you, consult your financial
advisor prior to investing.