Smart Money: There is no easy credit fix
DEAR BRUCE: I know you have always tried to impress upon people the responsibility required in money matters. I also understand that lots of folks get into debt a little at a time and don’t really realize it’s happening until they are up to their eyeballs.
Having said that, there are many companies that can fix a trashed credit record. You will find that they advertise extensively. I think you do your readers a disservice when you don’t acknowledge that these credit-fixing companies can get things taken off your report. A re-established credit allows people to borrow at more favorable rates. I would appreciate it if you would address this. — D.A., via e-mail
DEAR D.A.: There’s no question there are many companies that advertise an ability to repair credit. I have yet to see one that can do so legitimately. It’s true, there are ways to even get a bankruptcy off the credit report, albeit temporarily. I don’t know how this serves the person, but it certainly doesn’t serve the community.
If you’ve gone through a bankruptcy, credit grantors deserve to know this – that’s why we have credit reporting agencies. Consumer credit counseling is quite a different matter. These are folks who sit down and show individuals how they got into, and how then can get out of, their situation. They can also negotiate for more favorable rates with creditors who recognize that getting half a loaf is far better than getting none.
Responsible living and money handling requires skill and patience. Once a credit reputation has been trashed it takes time to rebuild it – as it should. While many don’t agree with me on this, I believe credit grantors have every right to know the truth about your background. This helps them make better business decisions as to whether they should risk their money on you. Does that seem unfair?
DEAR BRUCE: Recently, on a vacation to Las Vegas, I hit a slot machine for a little over $4,000. I was obliged to give my Social Security number to the casino officials before they would give me my check. They said that for a win over $1,500, they would need a Social Security number or they would take out taxes. While I can understand that, just as I was standing there a woman walked up and cashed almost $8,000 worth of casino chips and all they did was count out the chips and give her the $8,000. How come she can cash in her winnings (I assume she was winning), while I cannot? — N.B. Ogden, Utah
DEAR N.B.: You put your finger on one of the assumptions. You can see someone playing at a game table with thousands of dollars in front of them and it looks like they’re a big winner. They could very well have cashed in a ton of their own money to buy those casino chips piled high on the table. There is no real way to determine if they are a winner (unless you ask them, and even then you can’t be sure). They are only allowed to cash in up to $10,000 worth of chips a day without making some arrangement for payment of taxes. You could argue that you might have put $6,000 into those machines before you made your big hit, but the rules are a casino must get a Social Security number on winners of over $1,500. Be thankful that at least you had a lucky pull.
Send your questions to: Smart Money, P.O. Box 503, Elfers, FL 34680. E-mail to: [email protected]. Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.