Over the course of 2012, VantageScore Solutions president and CEO Barrett Burns has contributed a series of articles to Credit.com, which is now one of the go-to sources for expert information about credit scoring, credit reporting and credit cards. Credit.com was co-founded by Adam Levin. In addition to Credit.com, Adam is also Chairman and Co-Founder of Identity Theft 911 and is a nationally recognized expert in credit and identity theft protection.
The Score was able to ask Adam a few questions about the current state of credit, education, and his career as a consumer advocate.
Over the past two decades, Credit.com has built a trusted and successful brand because we are an educator, an advocate and a gateway to credit products and services which are appropriate to the individual consumer. We provide our visitors with an abundance of free, plain-language educational resources and access to an impressive array of credit experts. We teach consumers that their credit is an asset that they must build, nurture, manage and protect just as a professional money manager manages their investments. We want to help people understand that properly managed credit can be a resume and not a rap sheet. We give people access to their own credit data. Our completely free Credit Report Card shows people a composite of their trade lines, where they stand in the five major categories that comprise their credit score and we provide them with a credit score. Empowered with that information, they are better positioned to make smart, informed decisions about what types of financial products and services they need and are appropriate to their current standing (be it a credit card, a personal loan, or a credit reporting and/or monitoring product). Then we present them with the products or services best suited to their credit standing and their needs. We find that providing free, insightful, unbiased education, information and a vast array of appropriate products and services converts our visitors into recurring customers.
At the time I served as its Director, the New Jersey Division of Consumer Affairs, consisting of 28 bureaus and professional licensing boards, was one of the most powerful consumer advocacy and regulatory agencies in the nation. Working with the National Highway Traffic Safety Administration, we led two major tire recalls that pulled millions of defective tires off the road. Working with the FTC, we led a national effort to secure the right for professionals to advertise, thereby encouraging greater price competition and established greater consumer protections in the health spa industry. I worked with the New Jersey legislature and various state regulatory agencies to enact and/or promulgate over 40 major consumer protection laws and regulations. I vigorously promoted financial literacy programs throughout the state, developed new consumer educational materials and distribution channels, developed and personally funded the Tel-Consumer system (a semi-automated consumer education audio program that served hundreds of thousands of New Jersey residents), and made over 1,200 consumer education presentations in five years. I worked with local elected officials and established consumer affairs offices in all 21 counties in the state.
The Division built a reputation as being pro-consumer without being anti-business. We fought for transparency and fairness in the marketplace. Our goal was to level the playing field.
I learned that regardless of how many laws and regulations were enacted or how vigorously they were enforced, the ultimate guardian of the consumer is the consumer, and that it all begins with consumer education. I learned that the most effective way to protect consumers is to promote cooperation, collaboration and communication among government, business, media and consumers.
If there’s one rule, it’s this: Make it simple. Credit is confusing and most people don’t understand it, much less manage it the way they should. It’s easy for credit experts to shoot right over people’s heads when they’re explaining one of the many credit nuances that exist. So we aim to make everything we do, whether it’s the articles we write, the videos we produce or the tools we create, to be clear and intuitive. Our headlines are designed to grab you – often they are shocking but what really attracts readers is that they concern issues which with they can personally identify, often emotionally. Dealing with a debt collector, trying to understand how to shop for a mortgage or personal loan, correcting a mistake on a credit report. These are daunting and often scary experiences for consumers. We try to assuage some of that anxiety by empowering consumers with valuable, actionable information. For example, the Credit Report Card translates individuals’ credit reports, and anyone who has ever spent time looking at a credit report knows that they can be hard to decipher. For us that is Job One: to make credit simple.
The biggest mistake that people make is that they think identity theft is preventable. It’s not. If it hasn’t already, it will happen to you at some point in your life. All you can do is minimize your risk of exposure, enroll in credit and public records monitoring programs or institute personal monitoring strategies whereby you obtain your credit reports, review your bank and credit card accounts daily for warning signs, sign up for text and email transaction notification programs with your financial institutions and have a damage control program in place to assist you when it does eventually happen. Many people believe that such programs are expensive. In fact, many institutions with which you do business actually offer such assistance, in many cases free – or at minimal expense – as a perk of your relationship. So, check with your insurance agent, your account representative at your bank or credit union, your human resources manager at work or the office of student services at your college or university to learn what programs they offer and the cost to you. There are also a host of third party programs available. Just go to Error! Hyperlink reference not valid., which is operated by the Consumer Federation of America, to learn the questions you should ask of any company offering protection services.
You need to have a serious and ongoing dialog with your children about the positives and negatives of credit and the dangers of identity theft. This conversation should begin in high school. Kids need to understand that credit can be their best friend or their worst enemy, that credit can be an enabler, a wealth builder, rather than a vehicle of self-destruction. The key is financial literacy. Unfortunately, it is rarely taught in high school or college, therefore the training ground by necessity is the family.
They need to visualize credit as an asset that they must build and protect and not abuse.
That means judicious use of credit cards. In their early years in college they should see it as a safety net for emergencies, which means, as my good friend Gerri Detweiler likes to say, “If you can’t eat it, wear it, drink it, or smoke it, you shouldn’t be charging it because it is not an emergency.”
They should learn about the importance of checking their credit report because it is their economic fingerprint, as their credit score is their GPA for life.
They must learn to always pay their bills on time, never use too much of their available credit, build a strong and long credit history, develop a solid mix of installment, revolving and mortgage accounts and be prudent as to how much credit they seek to obtain. And, of greatest import they must never get in over their heads.
When it comes to seeking credit products, they must learn to read the fine print (which, thanks to certain reforms is now often bigger, bolder, more prominently displayed). They must read notices they receive from financial institutions and opt-in or opt-out where appropriate.
They must learn to protect their personal information, limit the credit products they carry in their wallets, shred all documents with personal information they discard, use strong passwords, never share passwords between accounts, limit the information they give to people they don’t know, be careful about the links and pictures upon which they click, be wary of phishing, put the most up-to-date security software on their computers, iPads and smart phones. They must avoid going to peer-to-peer file sharing sites as well as restrain themselves from giving out too much information on social networking sites.
They may not want to hear it, but they must.