I think I've made a bad mistake. After maxing out my credit cards and receiving many dunning notices, I sought help from a credit repair company. After several months, the company hasn't done anything to help, and I'm still in bad financial trouble. What can I do now?
- Harry Hoodwinked
Dear Mr. Hoodwinked: Regrettably, you definitely were "hoodwinked" out of an upfront sum to supposedly fix your credit mess (and alter your credit ratings) so now you're faced with double trouble. Although many desperate consumers need legitimate credit counselors, which I'll address in a moment, let me first mention what folks should watch for when approached - directly or indirectly - by "credit repair" businesses; even if too late for you, perhaps your dilemma may help others to avoid the trials and tribulations you're going through.
Those of us at the end of our spending ropes mustn't forget the scammers who crouch behind way too many financial trees ready to pounce upon us as we stroll past. Moreover, I've certainly previously echoed experts many times when I urge consumers never to trust any unknown who promises a quick fix, especially without a thorough background check. Remember the only "fixers" are the credit reporting bureaus that maintain your credit history. They collect information reported by banks, department stores, mortgage companies, and other creditors. The Big Three (TransUnion, Experian, and Equifax) can legally report accurate credit info seven years and bankruptcy date for ten years and, most importantly, this precise information cannot be erased by any company that promises to "repair" your credit score. The only items within your reports that can be changed are those either in error or those that go beyond the seven or ten year reporting periods. If your credit report contains any genuine mistakes, you can fix them yourself by personally contacting the credit reporting agencies. Obviously, this is why I beg readers to take advantage of your free yearly credit reports. (And why I pay my extra $39 for a six-month checkup, just like I've discussed in the past.)
If you're approached by a "fixer-upper" and, against all reason, lose every dab of common sense, please don't hand out personal information or write a check until you contact your state's Attorney General. Additionally, check with the Better Business Bureau or local consumer protection agencies to see if complaints have been lodged. (Even if no complaints, still don't throw yourself in the path of this oncoming scamming bus.)
But Mr. Hoodwinked still needs to know how to resolve this mess. First, call your Attorney General's office. Many states have laws on their books that regulate consumer repair companies. Even if your state hasn't any laws on the book, you still may have legal rights against the company and get back the money you spend on the "fix." Secondly, seek advice from a trustworthy credit counseling service to help pay your bills and to maintain or patch your financial reputation. These good folks offer a wealth (pardon the pun) of experience to help you back on the road to financial recovery.
For charitable deductions, little things add up, too. For example, you can write off out-of-pocket costs incurred while doing work for a charity, such as ingredients for casseroles you prepare for a nonprofit organization's soup kitchen and stamps you buy for a school's fund-raising mailing.
Ellen Phillips is a retired English teacher who has written two consumer-oriented books.