Late payment, like nonpayment, will be recorded on credit report

BONDY ON MONEY

August 07, 1994|By SUSAN BONDY | SUSAN BONDY,Creators Syndicate

Q: Could you please tell me how to clear up my credit? I have a copy of my Trans Union credit report, and some of the bad stuff on there has been paid off. I keep sending them letters but they still haven't taken it off. What should I do?

A: I'd like to be able to help you, but there's nothing that I, or anyone else, can do. You see, a credit report is really a credit VTC history that must include all credit experiences over the past seven years. Bankruptcies stay on your credit history for 10 years.

Your credit history should state that your past debts have been paid off, but if they were paid late, that information is still important and relevant to new lenders.

If, by some chance, your credit report still shows bills you have already paid as unpaid, the lending institution needs to notify the credit bureau of those facts.

You can also write a letter to the credit reporting agency, providing it with the disputed details. The agency must investigate your complaint within 30 days or delete the offending entry. However, you would get quicker results if you contacted the lender directly.

If this "bad stuff" happened during a difficult period in your life (job layoff, medical emergency, messy divorce, etc.), you might want to type a short explanation (100 words or less) and send it to the credit-reporting agencies. Most credit bureaus will attach it to your credit record. This way, potential lenders can see your side of the story.

Q: I have tried without success to determine the status of some Goldome Corp. stock I purchased in 1990. The firm was placed into receivership effective May 31, 1991. Numerous calls to my stockbroker and Goldome have not provided any further insight. Can you help me figure out where it stands?

A: In 1991, Goldome went out of business. When a bank goes bankrupt or gets taken over by another bank, depositors generally come out intact, but shareholders almost always lose their entire investments. As of now, and most likely for all time to come, your Goldome stock is worthless. The best you can do is use it as a tax loss against gains you have in other holdings.

If you have no taxable gains this year, you can carry this loss forward until you use it up.

This story should serve as a warning to investors. Although some banks' stocks have done extremely well over the past few years, investing in one is a gamble, just like any other common stock but unlike certificates of deposit, which are safe and insured by the federal government.

Bank bonds are safer than the common stock but are only as safe as the issuing bank is healthy.

By the way, CD holders are not completely immune from harm. When banks take over other banks, some continue the old CD terms while most reduce the CD rate to current levels. Anyone who bought a 10 percent 10-year CD five years ago and now finds the new takeover bank will only pay 5 percent understands this subtle risk.

Susan Bondy founded her namesake financial services company 1980 to provide financial planning and asset management. She is a frequent guest on "Good Morning America," the "Today Show" and National Public Radio. She is the author of "How to Make Money Using Other People's Money." Write to Susan Bondy in care of The Sun, 501 N. Calvert St., Baltimore, MD 21278. All letters will be treated confidentially.

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