| If you have ever tried to dispute items on your credit report, you may have received a response from the credit bureaus stating they performed their "investigation." The bureaus may also tell you that they "verified" whatever item you disputed. This means that negative item will remain on your credit report. In paragraph number two of a credit bureau dispute response the bureaus encourage you to add a 100-word consumer statement to your report. This is where many people add a short essay on why they deserve credit. People often mistakenly use the 100-word statement to explain some situation that led to their bad credit. For example, they may want to justify late payments with the loss of a job or a medical condition. However, do not be misled by the "opportunity" to add a consumer statement to your credit report. This "concession" by the credit bureaus is not a concession at all. In fact, the 100-word statement will only make matters worse for you. Here is a common consumer statement: "The late payments you see on my credit file were not my fault. My employer fired me due to no fault of my own. I quickly found a new job and now pay my bills on time every single month." The unexpected loss of employment may sound like a reasonable explanation to be late once or twice on a credit card bill. Plus, I would give that person credit for catching up on her bills and staying current since the bad financial spell. Credit bureaus really could care less that your inability to pay your bills was due to no fault of your own. They see things in black and white. You either paid your bills on time (according to the creditor) or you did not pay your bills on time. Credit bureaus interpret the situation as somebody who is irresponsible. They see her as a bad credit risk because she does not have enough savings to cover bills then things get tough. Attaching a 100-word statement is really bad for three additional reasons: (1) Such a statement confirms that Yes - you really were late on those payments. (2) The credit bureaus will ignore any future disputes you mail because you already admitted fault. (3) Should you apply for new credit in the future; every creditor will see your candid admission that you are not able to pay your bills during times of emergency - and therefore a bad credit risk. As you can see, attaching a 100-word written statement to your credit report could possibly be the worst step you can take. In fact, it is only an option because it was part of the original Fair Credit Reporting Act enacted in the 1970's. Thirty years ago bankers actually manually reviewed credit applications and read those statements personally. In today's digital world most applications are reviewed electronically. Thus, such a statement only serves as another way for the credit bureaus to ignore your credit report dispute. Briefly, the 100-word statement is dangerous to your credit file. It serves no good purpose for the consumer whatsoever. |
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