Many people think the importance of having a good credit reputation and a good credit score is a relatively new phenomenon--introduced around the time of the first plastic credit card for the masses about a half century ago. Not so, says Georg Finder, an Orange County, Calif.-based independent credit evaluator.

"Businesses and individuals as far back as 100 years ago were experiencing the same kind of financial hurt we feel today when a good credit reputation turns bad," says Finder. "And people back then where just as angry and frustrated as we are when someone harms our credit--either on purpose out of spite, by errors or by negligence."

In fact, the first recorded case involving credit reputation damage occurred 100 years ago in 1912 (Simonoff v. Jas H. Goodman & Co. Bank, 18 Cal.App.5). Aaron Simonoff was a women's clothing manufacturer who banked with Jas H. Goodman & Co. Bank in Napa, California. The bank incorrectly told Simonoff's customers that his checks were no good. Simonoff sued the bank for $75,000 arguing that because of the bank's actions, he had suffered great injury to his name, his standing as a reputable merchant was lost and his credit destroyed. The court agreed, stating, "The dishonor of a trader's check without right is a grievous wrong, since the drawer's credit suffers, and a single wrongful refusal to honor his check might work his ruin as a business man."

"The court also said that an individual or business that negligently or purposefully ruins someone's credit is financially responsible for the damage that occurs now and in the future," says Finder. "The law today is the same as it was then."

People ruining other people's good credit, whether intentional or not, goes back even farther in time--since people first started exchanging goods and services with each other. "Whether bartering, trading, buying or selling, the importance of honoring financial obligations and its impact on people's reputation is part of the human experience," says Finder.

Credit reputation damage today has an even more far-reaching effect. "When credit is damaged, it can result in higher insurance premiums, higher credit card, mortgage and lease rates, lower or cancelled credit limits and business lines of credit, increased banking fees and even denial of employment.  The monetary impact can be significant and longlasting," says Finder. "With credit so much a part of our lives, credit reputation damage has become even more significant over the decades."

Finder suggests that businesses and individuals check their credit through the three credit reporting bureaus at least once a year. "If your credit has been damaged because of no fault of your own and you are suffering financial hardship as a result, seek legal advice," says Finder. "Credit reputation damage is a compensable and measurable damage that can be presented in court."

1. Don't ignore your mortgage problem

If you are unable to pay--or haven't paid--your mortgage, contact your lender or the company that collects your mortgage payment as soon as possible. Mortgage lenders want to work with you to resolve the problem, and you may have more options if you contact them early. Call the phone number on your monthly mortgage statement or payment coupon book. Explain your financial situation and offer to work with your lender to find the right payment solution for you. If your lender won't talk with you, contact a housing counseling agency. You can find a list of counseling resources at NeighborWorks Leaving the Board and on the U.S. Department of Housing and Urban Development's (HUD) website or by calling (800) 569-4287.

2. Do your homework before you talk to your lender or housing counselor

Find your original mortgage loan documents and review them. Review your income and budget. Gather information on your expenses, including food, utilities, car payment, insurance, cable, phone, and other bills. If you don't feel comfortable talking to your lender, contact a housing or credit counseling agency. Counselors can help you examine your budget and determine the options available to you. They may also advise you about ways to work with your lender or offer to negotiate with your lender on your behalf.

3. Know your options

Some options provide short-term solutions/help, while others provide long-term or permanent solutions. You may be able to work out a temporary plan for making up missed payments, or you may be able to modify the loan terms. Sometimes, the best option may be to sell the house. For information on different options, visit HUD's website or Foreclosure Resources for Consumers for links to local resources.

4. Stick to your plan

Protect your credit score by making timely payments. Prioritize bills and pay those that are most necessary, such as your new mortgage payment. Consider cutting optional expenses such as eating out and premium cable TV services. If your situation changes and you can no longer meet your new payment schedule, call your lender or housing counselor immediately.

5. Beware of foreclosure rescue scams

Con artists take advantage of people who have fallen behind on their mortgage payments and who face foreclosure. These con artists may even call themselves "counselors." Your mortgage lender or a legitimate housing counselor can best help you decide which option is best for you. For tips on spotting scam artists, visit the Federal Trade Commission's website, Foreclosure Rescue Scams. Report suspicious schemes to your state and local consumer protection agencies, which you can find on the Consumer Action Website.

Thank you for choosing Consumer Advocates Credit Counselors. We welcome your comments and suggestions for future issues. Please email education@caccdebt.org with your ideas.

Even one of these problems can be personally devastating. But what if you're facing all three at once?

Meet author and "edutainer" Wayne Nance. His personal journey uncovered a proven solution-a solution that can alter your health, money, and relationships in only three minutes.

"At age twenty-nine," says Nance, "I weighed 305 pounds, smoked incessantly, was financially crippled with $40,000 in credit card debt, and was facing divorce. I was a card-carrying workaholic, sacrificing my family for fortune. My cardiologist said, 'Wayne, at this rate, you won't see forty.' Soon after that, I got a shocking wake-up call from reality."

In The 3-Minute Difference, Nance describes his journey back from the ragged edge of reality to a healthy, productive life. Through personal experiences, twenty-five years of research and development along with training life coaches, Wayne has been there, done that and understand why we struggle with weight, money and relationships. During this time, he spent eight year traveling the country with a clinical stress psychologist, a sports nutritionist, and a personality therapist, studying what motivates people in their physical, financial, and personal choices, Wayne discovered that being overweight, in debt, and in failing relationships are all interrelated and emotionally based.

Over time, Wayne altered his core attitudes and beliefs, resulting in his losing more than one hundred pounds, eliminating his credit card debt, and rescuing his relationships with his wife, Shannon, and their three daughters. As a result, he became passionate about devoting his life to educating individuals, families and companies about these imperative life issues.

By taking a simple 3-minute survey online, you can discover your personal "life pattern"-the key to your core attitudes and the basis for creating permanent alterations in your life. This is NOT a personality test. This is your core attitude by the age of 6. Scientifically developed and proven 88% accurate, the survey is quick and easy, but the results are eye-opening and revealing.

Tom Ziglar, president and CEO of the Ziglar Corporation talks about The 3-Minute Difference: "Zig Ziglar says, 'Your attitude, not your aptitude, determines your altitude in life.' The 3-Minute Difference is a fantastic book that hits the attitude nail on the head and is perfect for people who want more success in their personal, family, business, and spiritual lives. The three-minute survey helps you pinpoint the attitude you have while the book gives you a specific game plan on how you can take control of your attitude, eliminate the negatives, and start achieving more of the things you want."  

The 3-Minute Difference is about more than just weight, money, and marriage. With the five insightful steps Nance offers for ALTERing your attitude, you can apply these principles to any area of your life that is out of control:

A = Awareness. Become aware of your attitude, the natural, inborn hardwiring and soft wiring that drives your beliefs and behavior.

L = Learn. Learn as much as you can about your wiring which is at the core of your attitude, and how it impacts your beliefs and ultimately life choices.

T = Tactical plan. Customize a specific plan that will address the issues that you need to work on in your life. One size does not fit all.

E = Execute the plan. Execute and start working now on a daily plan of action for 91 days to improve your life. Stop talking about it, stop thinking about it and just walk the walk.

R = Re-evaluate. Every 91 days for one year reevaluate your progress and adjust your goals to continue on your journey to self-improvement. As Wayne says, "Don't eat the elephant in one bite."

Nance thoroughly explores each of these vital areas, defining and explaining them in detail. Readers will come away with surprising, perhaps first-time-ever insight into their own core attitudes, and how it impacts their beliefs and choices. The 3 Minute Survey is a valuable tool to use in improving life in the areas of finances, relationships and health. We can achieve our life goals. We can correct destructive life patterns.

Free Workshops and Seminars 

As a non-profit Credit Counseling and Financial Education organization, CACC is dedicated to reaching out to the community. CACC provides financial education seminars and workshops at community centers, local organizations, and companies.    

• Managing Money in Tough Times
• Creating and Using a Spending Plan
• Managing Debt
• Fighting Identity Theft and Financial Fraud
• Understanding Your Credit Report and Boosting Your Credit Score
• Creative Ways to Teach Kids About Money
• How to Get Out of Debt