SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934

Filed by the Registrant |X|
Filed by a Party other than the Registrant | |

THE CREDIT STORE, INC.

(Name of Registrant as Specified In Its Charter)

----------------------------

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

|X| No Fee required.
| | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

1) Title of each class of securities to which transaction applies:

2) Aggregate number of securities to which transaction applies:

3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

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5) Total fee paid:

| | Fee paid previously with preliminary materials.

| | Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

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THE CREDIT STORE, INC.

3401 North Louise Avenue
Sioux Falls, South Dakota 57107
800-240-1855

October 29, 2001

Dear Stockholder:

You are cordially invited to attend the Annual Meeting of Stockholders
to be held at the offices of Kronish Lieb Weiner & Hellman LLP, 1114 Avenue of
the Americas, 46th Floor, New York, New York 10036, commencing at 10 a.m., New
York City time, on Monday, December 17, 2001.

The Secretary's Notice of Annual Meeting and the Proxy Statement which
follow describe the matters to come before the meeting. During the meeting, we
will also review the activities of the past year and items of general interest
about the Company.

We hope that you will be able to attend the meeting in person and we
look forward to seeing you. Please mark, date and sign the enclosed Proxy and
return it in the accompanying envelope as quickly as possible, even if you plan
to attend the Annual Meeting. You may withdraw the Proxy and vote in person at
the meeting if you so desire.

Sincerely,

/s/ Kevin T. Riordan
--------------------
Kevin T. Riordan
President and Chief Operating Officer

THE CREDIT STORE, INC.

-----------

Notice of Annual Meeting of Stockholders

to be held on Monday, December 17, 2001

-----------

The Annual Meeting of Stockholders of The Credit Store, Inc. will be
held at the offices of Kronish Lieb Weiner & Hellman LLP, 1114 Avenue of the
Americas, 46th floor, New York, New York 10036, commencing at 10 a.m., New York
City time, on Monday, December 17, 2001 for the following purposes:

1. To elect a Board of six directors, to serve until the next
Annual Meeting of Stockholders or until their successors have
been duly elected and qualified.

2. To ratify the appointment of Grant Thornton LLP as independent
public accountants for the fiscal year ending June 30, 2002.

3. To transact such other business as may properly be brought
before the annual meeting.

The Board of Directors has fixed October 26, 2001 as the record date
for the annual meeting, and only holders of record of shares of Common Stock,
Series A Preferred Stock and/or Series B Preferred Stock at the close of
business on that date are entitled to receive notice of and vote at the meeting.

Your Proxy is important to ensure a quorum at the annual meeting. Even
if you own only a few shares, and whether or not you expect to be present, you
are urgently requested to date, sign and mail the enclosed Proxy in the
postage-paid envelope that is provided. The Proxy may be revoked by you at any
time prior to being exercised, and returning your Proxy will not affect your
right to vote in person if you attend the annual meeting and revoke the Proxy.

By Order of the Board of Directors,

/s/ Cynthia D. Hassoun
----------------------
Cynthia D. Hassoun
Senior Vice President and Corporate
Secretary

Sioux Falls, South Dakota
October 29, 2001

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PROXY STATEMENT

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GENERAL INFORMATION

The enclosed Proxy is being solicited by the Board of Directors of The
Credit Store, Inc. (the "Company") for use in connection with the Annual Meeting
of Stockholders to be held on Monday, December 17, 2001, at the offices of
Kronish Lieb Weiner & Hellman LLP, 1114 Avenue of the Americas, 46th floor, New
York, New York 10036, at 10 a.m. New York City time and at any adjournments
thereof. Proxies in the accompanying form which are properly signed, duly
returned to an officer of the Company and not revoked will be voted in the
manner specified. A stockholder executing a Proxy retains the right to revoke it
at any time before it is exercised by notice in writing to an officer of the
Company of termination of the Proxy's authority or a properly signed and duly
returned Proxy bearing a later date.

The address of the principal executive office of the Company is 3401
North Louise Avenue, Sioux Falls, South Dakota 57107 and the telephone number is
(800) 240-1855. The mailing of this Proxy Statement and the Board of Directors'
form of Proxy to stockholders will commence on or about November 2, 2001.

Only stockholders of record at the close of business on October 26,
2001, will be entitled to vote at such meeting or adjournment. At the close of
business on October 26, 2001, the Company had outstanding 34,851,465 shares of
Common Stock, 1,200,000 shares of Series A Preferred Stock and 800,000 shares of
Series B Preferred Stock. The holders of the Common Stock, Series A Preferred
Stock and Series B Preferred Stock all vote together as a single class on each
matter to be voted upon. Each share of Common Stock and Series B Preferred Stock
outstanding entitles the holder thereof to cast one vote. The Series A Preferred
Stock has preferential voting rights which permit the holders of the outstanding
shares of Series A Preferred Stock to cast 74.3% of all of the votes entitled to
be cast at the Annual Meeting of Stockholders to be held on December 17, 2001.
Each Share of Series A Preferred Stock entitles the holder thereof to vote its
proportionate share of the votes allocated to the outstanding shares of Series A
Preferred Stock.

The presence, in person or by proxy, of the holders of a majority of the
voting power of the outstanding shares of Common Stock, Series A Preferred Stock
and Series B Preferred Stock entitled to vote at the Annual Meeting will
constitute a quorum. The affirmative vote of a plurality of the votes present in
person or represented by proxy at the annual meeting and entitled to vote on the
election of directors is required for the election of directors. The affirmative
vote of a majority of the votes present in person or represented by proxy at the
annual meeting and entitled to vote is required for approval of all other
proposals presented in this Proxy Statement. Any shares not voted (whether by
abstention, broker non-vote or otherwise) will have no impact in the election of
directors, except to the extent that the failure to vote for an individual
results in another individual receiving a larger proportion of votes.
Abstentions as to the proposal to ratify the appointment of Grant Thornton LLP
as the Company's independent public accountants will have the same effect as
votes against such proposal. Broker non-votes will be treated as unvoted for
purposes of determining approval of such proposal and will not be counted as
votes for or against such proposal.

SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT

The following table sets forth, as of September 1, 2001, the ownership
of Common Stock and Preferred Stock of the Company by each stockholder who is
known by the Company to own beneficially more than 5% of the outstanding Common
Stock or any class of Preferred Stock of the Company, each director, each
director-nominee, each executive officer named in the Summary Compensation Table
on page 11, and all executive officers, directors and director-nominees as a
group.

Common Stock Preferred Stock (1)
------------ ------------------
Number Percentage Number Percentage
of Shares of Shares of Shares of Shares
--------- --------- --------- ---------
Principal Stockholders:

Taxter One LLC(2) 7,678,000 22.0% 1,200,000(3) 100%(3)
555 White Plains Road 2nd Floor
Tarrytown, NY 10591

J.L.B. of Nevada, Inc. (2) 4,000,000(4) 10.3% -- --
1500 E. Tropicana Ave.
Suite 100
Las Vegas, NV 89119

Jay L. Botchman 18,328,000(5) 40.3% 1,225,000(6) 100%(6)
133 Quail Run Road
Henderson, NV 89014

Blum Family Trust 4,000,000 11.5% 400,000(7) 50%(7)
c/o Silverman Perlstein &
Acampora, LLP
100 Jericho Quadrangle,
Suite 300
Jericho, NY 11753

Renaissance Trust I 4,000,000 11.5% 400,000(8) 50%(8)
James B. Panther and Marie
Panther, Trustees
1635 South Pacific Street
Oceanside, CA 92054

Michael Lauer, Lancer 8,252,500(9) 23.7% -- --
Partners, L.P., and Lancer
Offshore, Inc.
375 Park Avenue, Suite 2006
New York, NY 10166

Directors and Named Executive
Officers:
Kevin T. Riordan 879,422(10) 2.5% -- --
Michael J. Philippe 445,430(11) 1.3% -- --
Richard S. Angel 341,538(12) 1.0% -- --
Cynthia D. Hassoun 110,765(13) * -- --
Patrick L.F. Steffl 87,060(14) * -- --
Barry E. Breeman 150,000(15) * -- --
J. Richard Budd, III 166,300(16) * -- --
Peter J. Mansbach 115,000(17) * -- --
Geoffrey A. Thompson 170,000(18) * -- --
Salvatore J. Zizza 150,000(19) * -- --
All directors and executive * -- --
officers as a group (12 persons) 2,707,529(20)

----------
* Less than 1%

(1) At September 1, 2001, the Company had outstanding 1,200,000 shares of
Series A Preferred Stock, 800,000 shares of Series B Preferred Stock,
5,000 shares of Series C Preferred Stock, 10,000 shares of Series D
Preferred Stock, and 10,000 shares of Series E Preferred Stock. All
percentages indicated are for each separate class of Preferred Stock,
rather than for all Preferred Stock classes as a whole.

(2) Mr. Botchman owns 100% of the membership interests in Taxter One and
owns 100% of the outstanding capital stock of J.L.B. of Nevada.

(3) Consists of 1,200,000 shares of Series A Preferred Stock.

(4) Consists of 4,000,000 shares of Common Stock issuable on the exercise of
a warrant with an exercise price of $3.25 per share.

(5) Includes the shares beneficially owned by Taxter One and J.L.B. of
Nevada, 3,800,000 shares of Common Stock issuable on conversion of
10,000 shares of Series D Preferred Stock and 2,850,000 shares of Common
Stock issuable on conversion of 10,000 shares of Series E Preferred
Stock.

(6) Includes 5,000 shares of Series C Preferred Stock, 10,000 shares of
Series D Preferred Stock and 10,000 shares of Series E Preferred Stock
held of record by Jay L. Botchman and 1,200,000 shares of Series A
Preferred Stock held by Taxter One.

(7) Consists of 400,000 shares of Series B Preferred Stock.

(8) Consists of 400,000 shares of Series B Preferred Stock.

(9) Consists of 2,987,500 shares of Common Stock owned by Lancer Partners,
L.P., 4,730,000 shares of Common Stock owned by Lancer Offshore, Inc.,
and 535,000 shares of Common Stock owned by Michael Lauer. Mr. Lauer is
the investment manager for Lancer Partners, L.P. and Lancer Offshore,
Inc. and has the authority to vote and dispose of all shares of Common
Stock owned by these entities. Based on information as of February 27,
2000 contained in a Form 3 filed with the Securities and Exchange
Commission.

(10) Consists of shares of Common Stock issuable on the exercise of options
exercisable as follows: 300,000 shares at $2.00 per share, 100,000
shares at $2.70 per share, 200,000 shares at $2.40 per share, 50,000
shares at $6.47 per share, and 14,422 shares at $1.56 per share.
Includes 215,000 shares owned by Mr. Riordan's wife, as to which shares
Mr. Riordan disclaims beneficial ownership.

(11) Consists of 5,334 shares of Common Stock held by Mr. Philippe and shares
of Common Stock issuable on the exercise of options exercisable as
follows: 100,000 shares at $2.00 per share, 100,000 shares at $2.70 per
share, 200,000 shares at $2.40 per share, 30,000 shares at $6.47 per
share, and 10,096 shares at $1.56 per share.

(12) Consists of shares of Common Stock issuable on the exercise of options
exercisable as follows: 100,000 shares at $2.00 per share, 100,000
shares at $2.70 per share, 100,000 shares at $2.40 per share, 30,000
shares at $6.47 per share, and 11, 538 shares at $1.56 per share.

(13) Consists of shares of Common Stock issuable on the exercise of options
exercisable as follows: 75,000 shares at $2.00 per share, 15,000 shares
at $3.44 per share, 12,833 shares at $6.47 per share, and 7,932 shares
at $1.56 per share.

(14) Consists of shares of Common Stock issuable on the exercise of options
exercisable as follows: 35,000 shares at $2.00 per share, 10,000 shares
at $2.50 per share, 8,166 shares at $6.47 per share, 25,000 shares at
$2.88 per share, and 8,894 shares at $1.56 per share.

(15) Consists of shares of Common Stock issuable on the exercise of options
exercisable as follows: 75,000 shares at $2.00 per share, and 75,000
shares at $1.80 per share.

(16) Consists of 16,300 shares of Common Stock held by Mr. Budd and 75,000
shares issuable on the exercise of options with an exercise price of
$2.00 per share and 75,000 shares issuable on the exercise of options
with an exercise price of $1.80 per share.

(17) Consists of 115,000 shares of Common Stock issuable on the exercise of
options with an exercise price of $1.80 per share.

(18) Consists of 20,000 shares of Common Stock held by Mr. Thompson and
shares of Common Stock issuable on the exercise of options as follows:
75,000 shares at $2.19 per share and 75,000 shares at $1.80 per share.

(19) Consists of 150,000 shares of Common Stock issuable on the exercise of
options with an exercise price of $1.80 per share.

(20) Includes 91,514 shares of Common Stock issuable on the exercise of options
in addition to the shares and options listed in footnotes 10 through 18,
and includes 500 shares owned by William Buriak's wife.

ELECTION OF DIRECTORS

The By-Laws of the Company provide that the business of the Company
shall be managed by or under the direction of a Board of Directors of not less
than one director or such other minimum number of directors as is required by
law, which number shall be fixed from time to time by resolution of the
directors. Each director shall be elected at the Annual Meeting of Stockholders
for a term of one year or until a successor is elected and has qualified. The
Board of Directors has recommended that the number of directors to be elected
for the ensuing year be set at six and has nominated the six persons named below
for election as directors. Proxies solicited by the Board of Directors will,
unless otherwise directed, be voted to elect the six nominees named below to
constitute the entire Board of Directors.

All of the nominees named below are current directors of the Company.
Each nominee has indicated a willingness to serve as a director for the ensuing
year, but in case any nominee is not a candidate at the annual meeting for any
reason, the Proxies named in the enclosed form of Proxy may vote for a
substitute nominee in their discretion.

The following table sets forth information as to each nominee for the office of
director:

Name Age Position
-------------------------- --- ------------------------------------

Barry E. Breeman 52 Director
J. Richard Budd, III 49 Director
Peter J. Mansbach 64 Director
Kevin T. Riordan 49 President, Chief Operating Officer
and Director
Geoffrey A. Thompson 61 Interim Chairman of the Board of
Directors
Salvatore J. Zizza 55 Director

Barry E. Breeman. Mr. Breeman joined the Board of Directors in
September 1998. Since April 1998, Mr. Breeman has been Vice Chairman and Chief
Investment Officer of Manley Berenson Associates Inc.. From January 1991 to the
present, Mr. Breeman has been the managing member of Cambridge Real Estate
Services, LLC, and predecessor entities, a real estate investment banking
services business.

J. Richard Budd, III. Mr. Budd joined the Board of Directors in
September 1998. Since January 2001, Mr. Budd has been a partner in the
consulting firm Marotta Gund Budd & Dzera, LLC. From October 1998 to January
2001, Mr. Budd served as a consultant to troubled companies and to creditors of
troubled companies. Mr. Budd served as Senior Vice President of Metallurg, Inc.,
an international specialty metals producer, from January 1996 to October 1998.

Peter J. Mansbach. Mr. Mansbach joined the Board of Directors in May
2001. Mr. Mansbach is of counsel at the firm of Kronish Lieb Weiner & Hellman
LLP and engaged in a business law practice. He was Chairman of the Executive
Committee of Republic New York Corporation and of Republic National Bank of New
York from 1994 until 1998 and served as a director from 1994 through 1998. From
1991 through 1999, Mr. Mansbach was Chairman of the Board of Van Cleef & Arpels
and a member of its European Directoire.

Kevin T. Riordan. Mr. Riordan has been the President and Chief
Operating Officer of the Company since April 1997 and a director since September
2000. From February 1995 to March 1997, Mr. Riordan served as President and
Chief Executive Officer of Long Beach Acceptance Corp., a subsidiary of Long
Beach Mortgage Corp. From February 1985 to February 1995, Mr. Riordan was
President and Chief Executive Officer of Alliance Funding Company and its
successor in interest Alliance Funding Company, a division of Superior Bank FSB.

Geoffrey A. Thompson. Mr. Thompson joined the Board of Directors in
April 1999. Mr. Thompson has served as interim Chairman of the Board of
Directors since September 22, 2000. Mr. Thompson retired from Marine Midland
Banks, Inc., Buffalo, New York in October 1992, where he had served as President
and Chief Executive Officer. In addition, he serves on the boards of four
not-for-profit corporations and two public companies: Guardian Trust Company and
Sage Life Investment Trust.

Salvatore J. Zizza. Mr. Zizza joined the Board of Directors in May
2001. Since 1997, Mr. Zizza has been the Chairman of HallMark Electrical
Supplies Corp., a supplier of electrical supplies and lighting to electrical
contractors. From 1985 until 1997, Mr. Zizza was chairman and CEO of the LVI
Group, Inc., a company primarily engaged in interior construction. Mr. Zizza was
President and Chief Financial Officer of NICO, Inc., an interior construction
company, from 1978 until 1985, when NICO merged with the LVI Group. Mr. Zizza
currently serves on the boards of eight public companies: The Gabelli Asset
Fund, The Gabelli Convertible Securities Fund, The Gabelli Equity Trust, The
Gabelli Global Multimedia Trust, The Gabelli Growth Fund, The Gabelli Utility
Fund, Hollis Eden Pharmaceuticals, and Bion Environmental Technologies Inc.

None of the above nominees is related to any other nominee or to any
executive officer of the Company.

The Board of Directors held 11 meetings during fiscal 2001.

Compensation of Directors

Directors J. Richard Budd, III, Barry E. Breeman, Geoffrey A. Thompson
and Salvatore J. Zizza each receive $50,000 as annual compensation for their
serving on the Board of Directors. Peter J. Mansbach, also an outside director,
is of counsel to the firm of Kronish Lieb Weiner & Hellman LLP, a law firm which
provides legal services to the Company. Mr. Mansbach's services are charged as
legal fees and included in the regular monthly billing of Kronish Lieb Weiner &
Hellman LLP. He does not receive a separate director's fee.

The Company granted Mr. Budd and Mr. Breeman options to purchase 75,000
shares with an exercise price of $2.00 per share and 75,000 shares with an
exercise price of $1.80 per share. Mr. Thompson received options to purchase
75,000 shares with an exercise price of $2.19 per share and 75,000 shares with
an exercise price of $1.80 per share. Mr. Mansbach and Mr. Zizza each received
options to purchase 150,000 shares with an exercise price of $1.80 per share.
Mr. Mansbach has retained options to purchase 115,000 shares and transferred
options to purchase 35,000 shares to Kronish Lieb Weiner & Hellman LLP.

The Board of Directors may authorize the payment of compensation to
directors for their attendance at regular and special meetings of the Board of
Directors and for attendance at meetings of committees of the board of directors
as is customary for similar companies. Directors are reimbursed for their
reasonable out-of-pocket expenses incurred in connection with their duties as
directors or officers. The Board of Directors determines compensation for
directors, including those serving on the Compensation Committee.

Committees of the Board of Directors and Meeting Attendance

Audit Committee

The Company has an audit committee consisting of Barry E. Breeman, J.
Richard Budd, III, and Geoffrey A. Thompson. The audit committee had six
meetings in fiscal 2001. The audit committee meets with the Chief Financial
Officer and the Company's Controller and independent public accountants, and
monitors and reviews the Company's accounting, auditing and reporting practices,
system of internal controls, approves the scope and timing of the independent
public accountants' audit and discusses the meaning and significance of the
audited financial results. All of the members of the audit committee qualify as
independent under Section 121(A) of the American Stock Exchange listing
standards.

Compensation Committee

The Company has a compensation committee consisting of Barry E. Breeman,
J. Richard Budd, III, and Geoffrey A. Thompson, which grants or makes
recommendations to the Board of Directors concerning employee stock options,
bonuses and other compensation. The compensation committee had three meetings in
fiscal 2001.

Compensation Committee Interlocks and Insider Participation

The members of the Compensation Committee had no interlocking
relationship as defined by the Securities and Exchange Commission.

EXECUTIVE OFFICERS

The following table provides information regarding the current
executive officers of the Company other than Kevin T. Riordan:

Name Age Position
--------------------- ---- -------------------------------------
Michael J. Philippe 43 Executive Vice President, Chief Financial
Officer and Treasurer
Richard S. Angel 43 Executive Vice President and General Counsel
William Buriak 47 Senior Vice President and Chief Information
Officer
Cynthia D. Hassoun 50 Senior Vice President and Corporate Secretary
Michael L. Neher 37 Senior Vice President, New Business Development
Patrick Steffl 35 Senior Vice President, Marketing and Acquisitions

Michael J. Philippe. Mr. Philippe joined the Company in June 1997 as
Vice President of Finance and became Chief Financial Officer in September 1997.
In June 1999, Mr. Philippe was elected Executive Vice President, Chief Financial
Officer and Treasurer of the Company. Before joining the Company, Mr. Philippe
served as a Vice President and Manager for The Sumitomo Bank, Ltd. and its
predecessors for 13 years.

Richard S. Angel. Mr. Angel joined the Company in August 1997 as Vice
President, Secretary and Corporate Counsel. In June 1999, Mr. Angel was elected
Executive Vice President and General Counsel of the Company. From January 1992
to August 1997, Mr. Angel was a shareholder in the law firm of Buchalter, Nemer,
Fields & Younger in Los Angeles, California.

William G. Buriak. Mr. Buriak joined the Company as Chief Information
Officer July 1999. In September 1999, Mr. Buriak was elected Senior Vice
President and Chief Information Officer of the Company. From November 1996 to
July 1999, Mr. Buriak was Director of Management Information Services and
Director of Business Office Operations for CCDM, a non-profit healthcare system
in Perth Amboy, New Jersey. From June 1986 to November 1996, Mr. Buriak was
Assistant Vice President at Beneficial Finance Corporation in Peapack, New
Jersey.

Cynthia D. Hassoun. Ms. Hassoun joined the Company in October 1997 as
Chief Coordinating Officer. In April 1999, Ms. Hassoun was elected Corporate
Secretary of the Company and she was elected Senior Vice President of the
Company in June 1999. From April 1997 to September 1997, Ms. Hassoun served as a
consultant to the Company. From January 1992 to November 1996, Ms. Hassoun was
Vice President of Customer Service for Superior Bank FSB, a savings bank.

Michael L. Neher. Mr. Neher, Senior Vice President of New Business
Development, joined the Company in November 1999. From September 1998 to October
1999, Mr. Neher was the Assistant Vice President for Outsourcing-Card
Services/Consumer Products of the Atlanta, Georgia operation of the Bank of
Hawaii. From December 1995 to September 1998, he was the Regional Sales Manager
for Primus Automotive Financial Services, Atlanta, Georgia. From June 1993 to
November 1995, Mr. Neher served as the Business Line Supervisor, Collections and
Recovery-Consumer Loans for Ocwen Federal Bank & Trust FSB, West Palm Beach,
Florida.

Patrick Steffl. Mr. Steffl joined the Company in August 1997 as Vice
President of Marketing. Mr. Steffl was elected Senior Vice President of
Marketing and Acquisitions of the Company in June 1999. From 1989 until joining
the Company, Mr. Steffl had been with Fingerhut Companies, Inc. in Minnetonka,
Minnesota, managing mail and telemarketing media of six phone centers throughout
the country.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

Overview and Philosophy

The Compensation Committee of the Board is composed entirely of outside
directors. The members of the Compensation Committee are Barry E. Breeman, J.
Richard Budd, III, and Geoffrey A. Thompson. The role of the Compensation
Committee is to annually review and approve the compensation for all officers of
the Company. The Compensation Committee also administers The Credit Store, Inc.
Amended 1997 Stock Option Plan. The objectives of the Company's executive
compensation program are:

o to attract, retain, motivate and reward high caliber executives;

o to foster teamwork and support for the achievement of the Company's
financial and strategic goals through performance based financial
incentives; and

o to align the executive officers' interests with the interests of the
Company's stockholders through stock-based compensation.

The Company's executive compensation program strives to be competitive
with the compensation provided by comparable companies. The Compensation
Committee periodically conducts a review of its executive compensation program.
The purpose of this review is to ensure that the Company's executive
compensation program is meeting the objectives listed above. In addition, in
January 2000, the Company engaged the services of an independent compensation
consultant to advise the Company on its compensation policy at all levels. In
July 2000, the consultant provided a report to the Company and the Company,
based in part on the recommendations contained in such report, revised its
compensation policy, including for executive officers.

Executive Officer Compensation Program

The key components of the Company's executive officer compensation
program are base salary, annual incentive bonus and stock options. These
elements are described below. In determining compensation, the Committee
considers all elements of an executive's compensation package. Section 162(m)
("Section 162(m)") of the Internal Revenue Code of 1986, as amended (the
"Code"), generally limits the deductibility of compensation over $1 million paid
by a company to certain executive officers. The Section 162(m) limit does not
apply to "performance-based compensation," and the Committee seeks to structure
incentive compensation to executive officers to qualify as performance-based
compensation for Section 162(m) purposes and to be deductible by the Company
under current federal income tax laws.

Base Salary. The Compensation Committee annually reviews the base
salary of each executive officer. In determining appropriate salary levels, the
Compensation Committee considers salaries paid by comparable companies,
individual performance, including performance in relation to performance targets
for the then-ending fiscal year, and the level of responsibility, scope and
complexity of the executive's position. These factors are considered
subjectively in the aggregate and none of the factors is accorded specific
weight. In selected cases, other factors may also be considered. The base
salaries of Kevin Riordan and certain other officers were negotiated within the
context of employment agreements between them and the Company.

In keeping with the intent of the Committee to maintain a close
relationship between the Company's financial performance and executive salaries
and to align the executive's interests with those of the stockholder's, in June
2001 each of the Company's senior executive officers agreed to accept a 10%
salary reduction for fiscal 2002 in exchange for specified option grants with an
exercise price equal to market price on the date of grant.

Annual Incentive Bonus. Incentive bonuses paid in fiscal 2001 were
based on the Committee's evaluation of the Company's and the individual
executive's performance in fiscal 2000 with no individual component of
performance accorded a specific weight. For fiscal 2001, based in part on the
recommendation of the independent compensation consultant, the Compensation
Committee adopted a more structured incentive bonus plan. The purpose of the
this incentive bonus plan is to provide a direct financial incentive in the form
of an annual cash bonus to the executive officers who achieve performance
measurements established by the Compensation Committee.

Early in fiscal 2001, a "target opportunity" under the Company's
Incentive Compensation Plan was established for each executive officer. The
target opportunity amount was expressed either as a specific dollar amount or as
a percentage of annual base salary. The target opportunities ranged from
approximately 30% to 50% of base salary. The size of the target opportunity was
determined by the executive's job classification, employment status and other
factors deemed relevant by the Compensation Committee. The Compensation
Committee also established measurement criteria, which included performance
areas where improvement was deemed important to the successful growth and
profitability of the Company. The measurement criteria typically included
financial, customer service, teamwork, and employee satisfaction components.
Each measurement criterion was assigned a percentage weight, based on the value
the Compensation Committee assigned to achievement of that particular
measurement criterion. Eighty percent of the target opportunity was based on
Company performance and twenty percent was based on achievement of individual
objectives established for the executive officer. The Compensation Committee
will determine the bonus to be paid to each executive officer in fiscal 2002,
with respect to the performance of the Company and the executive in fiscal 2001,
based on the individual's target opportunity and the degree to which the
individual and corporate performance objectives have been achieved.

Stock Options. Option awards are intended to provide executives with
performance incentives based on the long-term performance of the Company. The
Amended 1997 Stock Option Plan is administered by the Compensation Committee,
which is authorized to award stock options to employees of the Company,
non-employee directors of the Company and certain advisors to the Company.

The Compensation Committee has broad discretion to select the optionees
and to establish the terms and conditions for the grant and exercise of each
option. At least annually, the Compensation Committee considers whether awards
will be made to executive officers under the Amended 1997 Stock Option Plan.
Such awards are based on job position, employment status, and length of service
with the Company. All of the Company's current executive officers received
options to purchase shares of the Company's Common Stock in fiscal 2001.

Generally option awards to executive officers have an exercise price
equal to fair market value on the date of grant and vest over a three-year
period, with one-third of the shares vesting each year. However, early in fiscal
2001, the Company granted options with an exercise price equal to one and
one-half times the market price on the date of grant. In addition, the options
granted to executive officers in exchange for their agreement to accept the 10%
salary reduction during fiscal 2002, vest during fiscal 2002 with one-quarter of
the shares vesting on the first day of each fiscal quarter.

Compensation of Chief Executive Officer

Martin J. Burke resigned as a director, officer, and employee of the
Company effective September 22, 2000. Before his resignation, Mr. Burke was
employed as the Company's Chief Executive Officer under a five-year agreement
dated March 27, 1997. Mr. Burke was paid an annual salary of $60,000. Mr. Burke
received a bonus of (a) 1.5% of the Company's annual net earnings before taxes
and (b) an option to purchase 1,000,000 shares of Common Stock, at an exercise
price of $2.00 per share. The Company also extended a $450,000 line of credit to
Mr. Burke.

In connection with his resignation, a Separation Agreement and Release
was executed in February 2001, effective as of December 11, 2000. The separation
agreement, which supersedes the previous employment agreement, requires the
Company to pay Mr. Burke $2,500 every two weeks until March 26, 2002 and to pay
his health insurance premiums during the same period. The Company also agreed to
pay Mr. Burke a bonus of 1.5% of the Company's annual pre-tax net earnings for
both the 2001 and 2002 fiscal years, with the 2002 payment being pro-rated for
10 months. In addition, the separation agreement permits Mr. Burke to retain his
option to purchase 1,000,000 shares of Common Stock. The option is exercisable
until December 15, 2002. The Company also agreed to loan Mr. Burke $25,000 to
pay his legal fees in connection with the separation agreement. In return, Mr.
Burke agreed to pay the credit line debt he owes the Company, which was $504,801
on December 11, 2000, and to repay the $25,000 loan for his legal fees, for a
total of $529,801. This debt is evidenced by a secured promissory note, which
bears interest at 8% per year, is payable monthly and matures on December 1,
2002. Mr. Burke's obligations under the separation agreement and the promissory
note are secured by the amounts payable to him under the agreement and by his
stock options. The separation agreement also contains mutual releases of the
parties.

On April 1, 1997, the Company entered into a five year employment
agreement with Kevin Riordan. Under the terms of the agreement, Mr. Riordan is
entitled to receive an annual base salary of $300,000 in each year of the
contract, subject to annual review by the Board of Directors of the Company. Mr.
Riordan, was granted options to purchase an aggregate of 325,346 shares of
Common Stock during fiscal 2001. Options to purchase 150,000 of these shares
were granted with an exercise price equal to one and one-half times the market
price on the date of grant and the remaining options were granted with an
exercise price equal to market price on the date of grant. Options to purchase
28,846 of these shares were issued in exchange for Mr. Riordan's agreeing to
accept a 10% salary reduction effective July 1, 2001 through June 30, 2002.

COMPENSATION COMMITTEE

Barry E. Breeman J. Richard Budd, III Geoffrey A. Thompson

SUMMARY COMPENSATION TABLE

The following table shows, for the Company's former Chief Executive
Officer, the acting Chief Executive Officer and each of the other four most
highly compensated executive officers of the Company (collectively, the "Named
Executive Officers"), information concerning compensation earned for services in
all capacities during the fiscal year ended June 30, 2001, as well as
compensation earned by each such person for the two previous fiscal years:

Long-Term
Compensation
Annual Compensation Awards
--------------------------------------------- -----------------
Number of
Fiscal Other Securities
Name and Principal Position Year Salary Bonus Compensation Underlying Option
--------------------------- ---- ------ ----- ------------ -----------------

Martin J. Burke, III (1) 2001 $60,000 $30,447 -- --
2000 61,304 60,505 -- --
1999 60,000 -- -- --

Kevin Riordan 2001 $300,000 -- -- 325,346
President and Chief 2000 305,919 -- -- 200,000
Operating Officer 1999 305,769 -- -- 100,000

Michael J. Philippe 2001 $210,000 $50,000 -- 169,192
Executive Vice President, 2000 214,188 50,000 -- 200,000
Chief Financial Officer and 1999 184,951 5,000 -- 100,000
Treasurer

Richard S. Angel 2001 $240,000 $ -- -- 172,077
Executive Vice President 2000 244,765 60,000 $43,956(2) 100,000
and General Counsel 1999 220,154 -- -- 100,000

Patrick L.F. Steffl 2001 $161,667 $25,000 -- 140,288
Senior Vice President, 2000 182,202 $25,000 -- --
Marketing and Acquisitions 1999 142,692 -- -- 165,000

Cynthia D. Hassoun 2001 $168,173 -- -- 85,865
Senior Vice President and 2000 162,698 -- -- 15,000
Corporate Secretary 1999 152,884 -- -- --

----------
(1) Mr. Burke resigned as Chairman of the Board of Directors and Chief
Executive Officer of the Company effective September 22, 2000. The Company
and Mr. Burke entered into a Separation Agreement and Release which is
described in the section titled "Employment Agreements."

(2) Represents reimbursements by the Company of income taxes resulting from
relocation payments.

OPTION TABLES

The following tables summarize stock option grants to and exercises by
the Named Executive Officers during the fiscal year ended June 30, 2001 and
other related information.

Option Grants In Last Fiscal Year

The following table contains information concerning the grant of stock
options to the Named Executive Officers for the Company's fiscal year ended June
30, 2001. These grants are also reflected in the Summary Compensation Table,
above.

Number of Percentage Potential Realizable Value
Securities of Total Options at Assumed Annual Rates
Underlying Granted to Exercise of Stock Price Appreciation
Options Employees Price for Option Term(2)
Name Granted(1) in Fiscal Year Per Share Expiration Date 5% 10%
----------------- ---------- -------------- --------- --------------- -----------------------------

Kevin Riordan 150,000(3) 7% $6.47 July 19, 2005 $268,500 $592,500
Kevin Riordan 146,500(4) 7% $1.56 June 26, 2006 62,995 139,175
Kevin Riordan 28,846(5) 1% $1.56 June 30, 2006 12,404 27,404
Michael Philippe 90,000(3) 4% $6.47 July 19, 2005 161,100 355,500
Michael Philippe 59,000(4) 3% $1.56 June 26, 2006 25,370 56,050
Michael Philippe 20,192(5) 1% $1.56 June 30, 2006 8,683 19,182
Richard Angel 90,000(3) 4% $6.47 July 19, 2005 161,100 355,500
Richard Angel 59,000(4) 3% $1.56 June 26, 2006 25,370 56,050
Richard Angel 23,077(5) 1% $1.56 June 30, 2006 9,923 21,923
Cynthia Hassoun 38,500(3) 2% $6.47 July 19, 2005 68,915 152,075
Cynthia Hassoun 31,500(4) 1% $1.56 June 26, 2006 13,545 29,925
Cynthia Hassoun 15,865(5) 1% $1.56 June 30, 2006 6,822 15,072
Patrick Steffl 24,500(3) 1% $6.47 July 19, 2005 43,855 96,775
Patrick Steffl 25,000(6) 1% $2.88 November 21, 2005 20,000 44,000
Patrick Steffl 14,000(7) 1% $2.88 January 16, 2006 11,200 24,640
Patrick Steffl 59,000(4) 3% $1.56 June 26, 2006 25,370 56,050
Patrick Steffl 17,788(5) 1% $1.56 June 30, 2006 7,649 16,899

----------
(1) Option granted pursuant to the Company's 1997 Stock Option Plan, as
amended.

(2) Potential realized values shown above represent the potential gains based
upon compound price appreciation of 5% and 10% from the date of grant
through the full option term. The actual value realized, if any, on stock
option exercises will be dependent upon overall market conditions and the
future performance of the Company and its Common Stock. There is no
assurance that the actual value will approximate the amounts reflected in
this table.

(3) Option vests over three years with one third of the underlying shares
vesting on each of July 19, 2001, 2002 and 2003.

(4) Option vests over three years with one third of the underlying shares
vesting on each of June 26, 2002, 2003 and 2004.

(5) Option vests as to one quarter of the underlying shares on the first day
of each quarter of fiscal 2002.

(6) Option fully vested as of the date of grant.

(7) Option vests over three years with one third of the underlying shares
vesting on each of January 16, 2002, 2003 and 2004.

Aggregate Option Exercises in Fiscal 2001 and Fiscal Year-End Option Values

Shares Number of Shares Value of Unexercised
Acquired Value Underlying Unexercised In-The-Money Options
Name On Exercise Realized Options at Fiscal Year-End At Fiscal Year-End(1)
------------------ ----------- -------- -------------------------- ---------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------

Martin J. Burke -- -- 1,000,000(2) -- $-- $ --
Kevin Riordan -- -- 600,000 325,346 $-- $68,385
Michael J. Philippe -- -- 400,000 169,192 $-- $30,885
Richard S. Angel -- -- 300,000 172,077 $-- $32,010
Cynthia D. Hassoun -- -- 90,000 85,865 $-- $18,472
Patrick L.F. Steffl -- -- 70,000 115,288 $-- $29,947

----------
(1) Value is based on the closing price of the Company's Common Stock on June
30, 2001, the last trading day of fiscal 2001, which was $1.95 per share.

(2) The shares of Common Stock which may be issued on the exercise of this
option and the proceeds, if any, received from any sale of these shares
are subject to a Security Agreement between Mr. Burke and the Company and
secure Mr. Burke's obligations to the Company under the secured promissory
note described under "Employment Agreements" below.

EMPLOYMENT AGREEMENTS

Before his resignation, Mr. Burke was employed as Chief Executive
Officer of the Company under a five-year agreement dated March 27, 1997. Mr.
Burke was paid an annual salary of $60,000. Mr. Burke received a bonus of (a)
1.5% of the Company's annual net earnings before taxes and (b) an option to
purchase 1,000,000 shares of Common Stock, at an exercise price of $2.00 per
share. The Company also extended a $450,000 line of credit to Mr. Burke. Mr.
Burke resigned as a director, officer, and employee effective September 22,
2000.

In connection with his resignation, a Separation Agreement and Release
was executed in February 2001, effective as of December 11, 2000. Under the
separation agreement, the parties agreed to terminate Mr. Burke's existing
employment agreement, along with the compensation, benefits and other
obligations under the employment agreement. In the separation agreement, the
Company agreed to pay Mr. Burke $2,500 every other week from September 29, 2000
through March 26, 2002 and to pay Mr. Burke's health insurance premiums during
the same period. The Company also agreed to pay Mr. Burke a bonus of 1.5% of the
Company's annual pre-tax net earnings for both the 2001 and 2002 fiscal years,
with the 2002 payment being pro-rated for 10 months. The Company also agreed
that Mr. Burke may retain his option to purchase 1,000,000 shares of Common
Stock. The option is exercisable until December 15, 2002. Finally, the Company
agreed to loan Mr. Burke $25,000 to pay his legal fees in connection with the
separation agreement. In the separation agreement, Mr. Burke agreed to pay the
credit line debt he owes to the Company, which was $504,801 on December 11,
2000, and to repay the $25,000 loan for his legal fees, for a total of $529,801.
This debt is evidenced by a secured promissory note, which bears interest at 8%
per year, is payable monthly and matures on December 1, 2002. Mr. Burke's
obligations under the separation agreement and the promissory note are secured
by the amounts payable to him under the agreement and by his stock options. The
separation agreement also contains mutual releases of the parties.

On April 1, 1997, the Company entered into a five year employment
agreement with Kevin Riordan, the Company's President and Chief Operating
Officer. In accordance with the terms of the Agreement, the Company paid Mr.
Riordan a signing bonus of $2 million and granted Mr. Riordan options to
purchase 300,000 shares of Common Stock at an exercise price of $2.00 per share.
The options will expire on the earlier of March 31, 2002, or the termination of
Mr. Riordan's employment. The employment agreement also entitles Mr. Riordan to
participate in all of the Company's employee benefit plans. Under the employment
agreement, employment terminates on the death or total disability of Mr. Riordan
and the Company may terminate his employment for cause which is defined as (a)
misconduct, (b) disregard of instructions from the Board of Directors, (c)
commission of specified crimes or acts or (d) a material breach of the terms of
the employment agreement. On September 22, 2000, Mr. Riordan was appointed to
the Board of Directors to fill the open directorship resulting from Mr. Burke's
resignation.

On June 17, 1997, the Company entered into an employment agreement with
Michael J. Philippe, who serves as Chief Financial Officer and an Executive Vice
President of the Company. The agreement was amended effective June 1, 1999 to
extend the term of the agreement to June 20, 2002. In accordance with the terms
of the agreement, Mr. Philippe received options to purchase 100,000 shares of
Common Stock at an exercise price of $2.00 per share. The options are
exercisable until December 15, 2002. The employment agreement also entitles Mr.
Philippe to participate in all of the Company's employee benefit plans. Under
the terms of the employment agreement, employment terminates on the death or
total disability of Mr. Philippe and the Company may terminate his employment
for cause which is defined as (a) misconduct, (b) disregard of instructions from
the Board of Directors, (c) commission of specified crimes or acts or (d) a
material breach of the terms of the employment agreement. The employment
agreement contains a change in control provision that provides Mr. Philippe with
the right to terminate his employment within 60 days of the date of a change in
control and have the termination treated by the Company as a termination without
cause, meaning that Mr. Philippe would have the right to continue to be
compensated through the term of the employment agreement. For purposes of the
employment agreement, a change of control is deemed to have occurred when either
(a) Taxter One owns directly or indirectly less than 10% of the Common Stock and
less than 50% of each other outstanding class of securities the majority vote of
which is required for stockholder action, or (b) Jay L. Botchman owns less than
50% of the membership interests in Taxter One.

On October 15, 1997, the Company entered into a three-year agreement
with Cynthia Hassoun, the Corporate Secretary and a Senior Vice President. The
agreement renews automatically for successive one-year terms unless terminated
by either party 90 days before the renewal date. The current term expires
October 15, 2002. Ms. Hassoun received options to purchase 75,000 shares of
Common Stock at an exercise price of $2.00 per share. The options are
exercisable until December 15, 2002. The agreement also entitles Ms. Hassoun to
participate in all of the Company's employee benefit plans. Under the terms of
the employment agreement, employment terminates on death or total disability of
Ms. Hassoun and the Company may terminate her employment for cause which is
defined as (a) misconduct, (b) disregard of instructions from the Board of
Directors, (c) commission of specified crimes or acts or (d) a material breach
of the terms of the employment agreement.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Mr. Botchman, the Company's controlling stockholder, owns and controls
J.L.B. of Nevada.

In fiscal 1998, the Company issued subordinated promissory grid notes
to J.L.B. of Nevada, with a maximum principal amount of $40 million which are
payable on demand and bear interest at a rate of 12% per year. $30 million
principal amount of grid notes were issued in exchange for outstanding notes
totaling $11,518,042 which accrued interest at a rate of 12% per year and
$18,481,958 in new debt. Interest expense on these notes was $2,000,801 for the
year ended June 30, 2001. At June 30, 2001 principal outstanding and accrued
interest related to subordinated notes payable to J.L.B. of Nevada, was
approximately $17.3 million and $2.6 million.

As of June 30, 2001, the Company's wholly-owned subsidiary, American
Credit Alliance, had an $880,000 note payable to J.L.B. of Nevada. The note is
payable on demand and accrues interest at a rate of 10% per year. Interest
expense for the year ended June 30, 2001 was $89,222.

On May 4, 2001, in consideration of J.L.B. of Nevada agreeing to amend
the payment terms of several promissory notes, the Company contractually
extended the expiration date of the conversion feature of its Series D Preferred
Stock until May 30, 2006 and the Series E Preferred Stock until August 30, 2006.

On October 8, 1996, Service One International, an entity which was
subsequently merged into the Company, entered into a Mutual Business Development
Agreement with Renaissance Trust I. The Company incurred royalty expenses of
$416,646 for the year ended June 30, 2001 under the Mutual Business Development
Agreement.

The Mutual Business Development Agreement is currently in dispute. In
February 2001 the Company discontinued payment of royalties under the Mutual
Business Development Agreement. On April 23, 2001 Renaissance Trust I filed suit
in the Southern District of New York alleging breach of the Mutual Business
Development Agreement and conversion and seek enforcement of the contract,
compensatory damages alleged to be in excess of $5 million and punitive damages
of $25 million. On June 29, 2001, the Court dismissed the conversion claim and
dismissed the demand for punitive damages. This case is in an early stage and no
assurance can be given as to its outcome.

Peter J. Mansbach, one of the Company's directors, is currently of
counsel at the firm of Kronish Lieb Weiner & Hellman LLP. Kronish Lieb Weiner &
Hellman LLP provides legal services to the Company.

PERFORMANCE GRAPH

Set forth below is a graph for the period from April 6, 2000, the date
the Company's Common Stock was registered under Section 12 of the Securities
Exchange Act of 1934, to May 31, 2000, comparing the yearly cumulative total
shareholder return on the Company's Common Stock with the yearly cumulative
total shareholder return of the S&P SmallCap 600 Index and an index of a group
of peer companies selected by the Company (the "Peer Composite Index"). The
comparison of total shareholder returns assumes that $100 was invested on April
6, 2000 in each of the Company, the S&P SmallCap 600 Index and the Peer
Composite Index, and that dividends were reinvested monthly. The companies in
the peer group are CompuCredit Corporation, NCO Group, Inc., Metris Companies
Inc., Providian Financial Corporation, and Capital One Financial Corporation.
The Company is not included in the peer group. In calculating the yearly
cumulative total shareholder return of the Peer Composite Index, the shareholder
returns of the companies included in the peer group are weighted according to
the stock market capitalizations of such companies at the beginning of each
period for which a return is indicated.

[GRAPH OMITTED]

The Credit Store, Inc.

April 6, 2000 May 31, 2000 June 30, 2001
The Credit Store, Inc. $100.00 $120.31 $ 48.74
Peer Composite $100.00 $102.98 $111.82
S&P SmallCap 600 Index $100.00 $ 97.92 $130.60

SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, and
the regulations promulgated thereunder require directors and executive officers
of the Company and persons who own more than ten percent of any class of the
Company's equity securities to file reports of their ownership and changes in
such ownership with the Securities and Exchange Commission. Such persons are
required by the Exchange Act to furnish the Company with copies of all Section
16(a) forms they file. To the Company's knowledge, based solely on a review of
copies of Section 16(a) forms submitted to the Company during and with respect
to fiscal 2001, all required reports were filed on a timely basis during fiscal
2001.

RELATIONSHIP WITH AND APPOINTMENT OF INDEPENDENT AUDITORS

The firm of Grant Thornton LLP, independent public accountants, has
been the auditors for the Company since 1999. The Board of Directors again has
selected Grant Thornton LLP to serve as the Company's independent public
accountants for the fiscal year ending June 30, 2002, subject to ratification by
the shareholders. While it is not required to do so, the Board of Directors is
submitting the selection of that firm for ratification in order to ascertain the
view of the shareholders. If the selection is not ratified, the Board of
Directors will reconsider its selection. Proxies solicited by the Board of
Directors will, unless otherwise directed, be voted to ratify the appointment of
Grant Thornton LLP as independent public accountants for the Company for the
fiscal year ending June 30, 2002.

A representative of Grant Thornton LLP will be present at the Annual
Meeting of Shareholders and will be afforded an opportunity to make a statement
if such representative so desires and will be available to respond to
appropriate questions during the meeting.

Audit Fees

The Company paid Grant Thornton LLP an aggregate of $380,000 for the
annual audit for the fiscal year ended June 30, 2001 and for review of the
Company's condensed financial statements included in the Company's quarterly
reports on Form 10-Q relating to the fiscal year ended June 30, 2001. The above
amounts include out-of-pocket expenses incurred by Grant Thornton LLP in
connection with the provision of such services.

Financial Information Systems Design and Implementation Fees

Grant Thornton LLP did not provide financial information systems design
and implementation services to the Company in fiscal 2001.

All Other Fees

The Company paid Grant Thornton LLP an aggregate of $135,000 for
services provided in connection with accounting research, registration
statements, a benefit plan audit and tax compliance. The above amount includes
out-of-pocket expenses incurred by Grant Thornton LLP in connection with the
provision of such services. The audit committee of the Board of Directors has
determined that the provision of these services is compatible with maintaining
accountant's independence.

REPORT OF THE AUDIT COMMITTEE

The role of the Company's Audit Committee is one of oversight of the
Company's management and the Company's independent auditors in regard to the
Company's financial reporting and the Company's controls respecting accounting
and financial reporting. By its Charter, the Audit Committee consists of three
independent non-employee directors. In performing its oversight function, the
Audit Committee relied upon advice and information received in its discussions
with the Company's management and independent auditors.

The Audit Committee has (i) reviewed and discussed the Company's
audited financial statements for the fiscal year ended and as of June 30, 2001
with the Company's management; (ii) discussed with the Company's independent
auditors the matters required to be discussed by Statement on Auditing Standards
No. 61 regarding communication with audit committees (Codification of Statements
on Auditing Standards, AU Section 380 and Statement on Auditing Standards No.
90); (iii) received the written disclosures and the letter from the Company's
independent auditors required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees); and (iv) has discussed with
the Company's independent auditors the independent auditors' independence.

Based on the review and discussions with management and the Company's
independent auditors referred to above, the Audit Committee recommended to the
Board that the audited financial statements be included in the Company's Annual
Report on Form 10-K for the fiscal year ended and as of June 30, 2001 for filing
with the Securities and Exchange Commission.

AUDIT COMMITTEE

Barry E. Breeman J. Richard Budd, III Geoffrey A. Thompson

OTHER INFORMATION

Annual Report

The Company's Annual Report on Form 10-K for the fiscal year ended June
30, 2001 is being mailed with this Proxy Statement.

Other Business

As of the date of this Proxy Statement, management knows of no matters
that will be presented for determination at the meeting other than those
referred to herein. If any other matters properly come before the meeting
calling for a vote of stockholders, it is intended that the shares represented
by the Proxies solicited by the Board of Directors will be voted by the Proxies
named therein in accordance with their best judgment.

Expense of Solicitation

The Company will pay the cost of soliciting Proxies in the accompanying
form. In addition to solicitation by the use of mails, certain directors,
director-nominees, officers and regular employees of the Company may solicit
Proxies by telephone, telegram or personal interview, and may request brokerage
firms and custodians, nominees and other record holders to forward soliciting
materials to the beneficial owners of stock of the Company and will reimburse
them for their reasonable out-of-pocket expenses in so forwarding such
materials.

Stockholder Proposals for 2002 Annual Meeting

Under the rules of the Securities and Exchange Commission, any
stockholder proposal intended to be presented at the Company's 2002 Annual
Meeting of Shareholders must be received by the Secretary of the Company at its
executive offices no later than July 8, 2002 in order to be considered for
inclusion in the Company's proxy statement and form of proxy relating to such
meeting.

If a stockholder notifies the Company of an intent to present a
proposal at the Company's 2002 Annual Meeting of Stockholders less than 60 days
before the meeting (and for any reason the proposal is voted on at that annual
meeting), the Company's proxy holders will have the right to exercise
discretionary voting authority with respect to the proposal, if presented at the
meeting, without including information regarding the proposal in its proxy
materials.

By Order of the Board of Directors,

Cynthia D. Hassoun
Senior Vice President and Corporate
Secretary
October 29, 2001

Appendix A
THE CREDIT STORE, INC.

Audit Committee Charter

(as of May 1, 2000)

Purpose

There shall be an Audit Committee of the Board of Directors of The
Credit Store, Inc., a Delaware corporation (the "Company").

The Committee shall have responsibility to oversee the Company's
management and outside auditors in regard to corporate accounting and financial
reporting. The Committee has the authority to conduct any investigation it deems
appropriate, with full access to all books and records, facilities, personnel
and outside advisors of the Company. The Committee is empowered to retain
outside counsel, auditors or other experts in its discretion.

Organization

The Committee shall consist of at least three directors. Each director
appointed to the Committee shall:

a) not be disqualified from being an "independent director" within the
meaning of Section 121A of the Amex Company Guide, and shall have no
relationship with the Company which, in the opinion of the Board,
would interfere with the exercise of independent judgment; and

b) be able to read and understand fundamental financial statements,
including the Company's balance sheet, income statement and cash
flow statement. If a director is not capable of understanding such
fundamental financial statements, he or she must become able to do
so within a reasonable period of time after appointment to the
Committee.

At least one member of the Committee shall have past employment
experience in finance or accounting, requisite professional certification in
accounting or any other comparable experience or background which results in the
director's financial sophistication.

Responsibilities

The Committee recognizes that the preparation of the Company's
financial statements and other financial information is the responsibility of
the Company's management and that the auditing, or conducting limited reviews,
of those financial statements and other financial information is the
responsibility of the Company's outside auditors. The Committee's responsibility
is to oversee the financial reporting process.

The Company's management, and its outside auditors, in the exercise of
their responsibilities, acquire greater knowledge and more detailed information
about the Company and its financial affairs than the members of the Committee.
Consequently, the Committee is not responsible for providing any expert or other
special assurance as to the Company's financial statements and other financial
information or any professional certification as to the outside auditors' work,
including without limitation their reports on and limited reviews of, the
Company's financial statements and other financial information.

In carrying out its oversight responsibilities, the Committee shall:

a) review and reassess the adequacy of the Audit Committee Charter
annually;

b) require that the outside auditors provide the Committee with a
formal written statement delineating all relationships between the
outside auditors and the Company, consistent with Independence
Standards Board Standard No. 1, and discuss with the outside
auditors their independence;

c) actively engage in a dialogue with the outside auditors regarding
any disclosed relationships or services that may impact the
objectivity and independence of the outside auditors;

d) take, or recommend that the full Board take, appropriate action to
oversee the independence of the outside auditors;

e) review and consider the matters identified in Statement on Auditing
Standards No. 61 with the outside auditors and management;

f) review and discuss the Company's audited financial statements that
are to be included in the Company's Form 10-K with the outside
auditors and management and determine whether to recommend to the
Board of Directors that the financial statements be included in the
Company's Form 10-K for filing with the Securities and Exchange
Commission; and

g) review, or the Committee's Chairman shall review, any matters
identified by the outside auditors pursuant to Statement on Auditing
Standards No. 71 regarding the Company's interim financial
statements. Any such review shall occur prior to the filing of such
interim financial statements on the Company's Form 10-Q.

The outside auditors are ultimately accountable to the Board and the
Committee, as representatives of the shareholders. The Board and the Committee
have ultimate authority and responsibility to select, evaluate and, where
appropriate, replace the outside auditors, and, if applicable, to nominate the
outside auditors to be proposed for approval by the shareholders in any proxy
statement.