The In-effective Credit Dispute Method

by: MattDouglas
Total views: 5
Word Count: 491

Credit bureaus respond to consumer credit disputes via mail. They will either delete or verify the information. If the item is verified, it means the bureau is keeping that information on your credit file.

The Fair Credit Reporting Act (FCRA) allows you to attach a 100-word essay to your credit report. This is the opportunity to explain the negative information and argue that you deserve new credit.

It is surely tempting to tell your side of the story by way of the "consumer statement." It appears as your opportunity to explain why you have negative items on your credit report. There probably is a good reason why you were late on that payment. Perhaps you were sick or got laid off from your job.

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.

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 interpret a late payment one way. They interpret it as an indication of a bad credit risk.

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.

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.

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.

Briefly, the 100-word statement is dangerous to your credit file. It serves no good purpose for the consumer whatsoever.

About the Author

Looking for quick and effective credit repair? Discover the secrets to deleting charge offs, judgments, collections, late payments, and raising your credit score. Plus, get a free credit dispute letter you can use to delete bad credit.  

More Articles from: Credit