Dispute Credit Report - Avoid This Common Mistake
Disputing negative credit items with the credit bureaus Equifax, Experian, and Transunion can often be a challenge. Many times the bureaus respond to a dispute with a letter indicating they verified the disputed item. Accordingly, you are stuck with the information being reported about you.
Credit bureaus always respond to disputes with a letter where they inform you that you have the right to attach a 100-word statement to your report. Often, people believe this is a good opportunity to explain away their negative information or argue their case.
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.
Do not mistake the 100-word statement for good faith on the part of the credit bureaus. As you will see, such a statement is usually used against your best interests.
People often send in statements like this: "I fell behind on my credit card bills, but I have since caught up. My boss laid me off from my job of 20 years. Even though I could not pay my bills, it was only a temporary situation and now I am current."
It may seem unreasonable to punish somebody for losing her job. Especially if she caught up on all her bills.
However, the credit bureaus and creditors read such a consumer statement entirely different. They don't see a good person who went through some brief and unexpected hard times.
Instead, the credit bureaus see somebody who isn't smart enough to have an emergency fund to cover basic minimum payments should something go wrong financially.
Writing a 100-word statement can damage your credit for three more reasons. First, such a statement only cements the fact that you paid your bill late. Second, the credit bureaus already have confirmation that the late payments are accurate. Thus, should you dispute the items in the future, the credit bureaus will ignore that dispute or deem it "frivolous." Third, any future creditor will expect you not to pay them should you run into another financial emergency.
As you can see, there is no benefit to the consumer when they attach the consumer statement. In fact, the purpose of the statement is so old and out-dated that it probably should be simply abolished. It was part of the original Fair Credit Reporting Act enacted by Congress in the 1970's. The statement has no purpose nowadays since most credit applications are reviewed electronically.
Nowadays applications for new credit such as a credit card or car loan are based upon your score - not your statement. Therefore, the statement is only a weapon that the bureaus can use to ignore your credit report disputes.
To summarize, the 100-word statement is out dated and dangerous. Avoid the temptation to explain bad credit. Instead, use the formal channels to challenge misleading credit information such as dispute letters and creditor interventions.
Credit bureaus always respond to disputes with a letter where they inform you that you have the right to attach a 100-word statement to your report. Often, people believe this is a good opportunity to explain away their negative information or argue their case.
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.
Do not mistake the 100-word statement for good faith on the part of the credit bureaus. As you will see, such a statement is usually used against your best interests.
People often send in statements like this: "I fell behind on my credit card bills, but I have since caught up. My boss laid me off from my job of 20 years. Even though I could not pay my bills, it was only a temporary situation and now I am current."
It may seem unreasonable to punish somebody for losing her job. Especially if she caught up on all her bills.
However, the credit bureaus and creditors read such a consumer statement entirely different. They don't see a good person who went through some brief and unexpected hard times.
Instead, the credit bureaus see somebody who isn't smart enough to have an emergency fund to cover basic minimum payments should something go wrong financially.
Writing a 100-word statement can damage your credit for three more reasons. First, such a statement only cements the fact that you paid your bill late. Second, the credit bureaus already have confirmation that the late payments are accurate. Thus, should you dispute the items in the future, the credit bureaus will ignore that dispute or deem it "frivolous." Third, any future creditor will expect you not to pay them should you run into another financial emergency.
As you can see, there is no benefit to the consumer when they attach the consumer statement. In fact, the purpose of the statement is so old and out-dated that it probably should be simply abolished. It was part of the original Fair Credit Reporting Act enacted by Congress in the 1970's. The statement has no purpose nowadays since most credit applications are reviewed electronically.
Nowadays applications for new credit such as a credit card or car loan are based upon your score - not your statement. Therefore, the statement is only a weapon that the bureaus can use to ignore your credit report disputes.
To summarize, the 100-word statement is out dated and dangerous. Avoid the temptation to explain bad credit. Instead, use the formal channels to challenge misleading credit information such as dispute letters and creditor interventions.
Source...