A Publication From
Wayne S. Shapiro
ATTORNEY AT LAW
111 West Washington Street
Suite 1028
Chicago, IL 60602
Phone: (312) 704-8400    FAX: (312) 704-0366
e-mail: honstlawyr@aol.com

Before approving mortgages, lenders use credit reports to check your character, credit rating, and capacity to make payments. Errors in your credit report can cost you the loan. The three most common mistakes in credit reports can be deadly to a consumer. The first is misposted accounts due to similar names. Although addresses and social security numbers are supposed to help report credit to the proper name, this information can be entered incorrectly - mistakes happen. The second occurs when multiple entries for the same account or previously closed accounts appear on the record. To a lender, extra accounts can mean too much debt or excessive credit with which a mortgagor can quickly run up debt and default on a loan. The third and most serious mistake, however, comes from disputed or improperly reported items. If the credit report has an incorrect outstanding balance that is too large, or shows that you are delinquent on your accounts, lenders will see a bad credit risk and deny your loan application.

Employees should also be wary Employers can obtain copies of your credit report for "legitimate business needs." Reports can be used to make evaluations for employment, promotion, transfer, or possible termination. Employers can also use credit reports to determine whether or not to grant an employee a security clearance. Employers often use credit reports to determine how employees handle their own finances and to check on their character - especially if that employee will be handling money on the job. The law does not require an employer to notify you before obtaining the report. However, the employer must tell you if the information contained in the report is the reason you were denied employment or promotion.

Once the employment relationship ends, employers are no longer entitled to access your credit report. For example, an employer has no right to the report of an employee who has quit, even if the employer suspects the employee was involved in embezzlement. Nor can employers run credit checks on former employees for use in wrongful termination or other employment litigation.

The best way to prevent your credit report from hurting you is to check it before buying a house or looking for a job. This is especially important if you were previously married and have not checked your report since the divorce. Your ex-spouse’s negative credit postings may haunt you by showing up on your report.

Straightening out your credit history can be a long, frustrating process, but is well worth the effort. Remember, while bad credit can hurt you, good credit can help you.

Contact the three major credit bureaus to obtain copies of your report. This ensures a thorough check, since the three bureaus do not share information. There may be a fee for a report. If you find a mistake in any of the reports, file a consumer dispute form with the applicable credit bureau, which is then required by law to investigate the complaint (usually within 30 days). The creditor must verify the disputed posting or it will be deleted. If the creditor verifies the posting, you can make a short statement explaining why you think the posting is wrong. This statement will be included with your credit report.

Contact the creditor and try to resolve the dispute. When it is resolved, have the creditor send confirming letters to all three credit bureaus. In 30 days, obtain a new copy of your report to verify that the errors have been corrected.

(See your yellow pages under "Credit Reporting Agencies" for local services.)

As condominium ownership increases in popularity - among everyone from the single, upwardly mobile and newlywed to the empty nesters and elderly - so will the incidence of condominium association fund theft. These funds, dues paid by owners to maintain common areas, are entrusted to boards of directors or management companies hired by boards. Theft ranges from a manager falsifying books and using fictitious invoices to allowing board members to charge their personal utility bills to the association’s accounts. And it’s more common than you think.

Unit owners owe it to themselves to get involved and hold association boards accountable for the funds they have been entrusted with. Ask your condominium board the following questions:

If the answer to any of these questions is no, bring it to the attention of your fellow owners and make sure the board corrects any problem. After all, it is your money and your home. It is your responsibility to review association fund procedures and make sure they are sound. If you would like advice or have further questions, contact our office.

Maintaining an office in your home has tax advantages. When a portion of your home is used regularly and exclusively as your principal place of business or as a place to meet clients or customers, an equivalent portion of your home’s mortgage principal, maintenance costs, insurance, and depreciation are deductible. For example, if you live in a 3,000 square-foot house and use your 300 square-foot den regularly and exclusively for business purposes, 10 percent of your home costs are deductible as business expenses. Exclusivity is important. The office space must not be used as a play room for your children, a spare bedroom, or for any other non-business use.

The IRS provides a special form for taxpayers claiming this deduction. One should note that anecdotal evidence shows that these forms are audited more often than other forms. Therefore, taxpayers who wish to claim this deduction should carefully document the exclusive business use of the property. The IRS will consider various factors including whether the home office is essential to the business, whether you spend a substantial amount of time there, and whether another location is available to do the work. If you are an employee, you must also show that maintaining the home office is for the employer’s benefit, not for your personal convenience.