The Wrong Way to Dispute Your Credit Report

by: MattDouglas
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Word Count: 507

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.

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.

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.

Let's assume that you were to attach a statement like this: "I was only late on my credit cards because I was laid off from work. Once I found another job I caught up on all my bills and have never been late since."

Losing her job due to no fault of her own seems like a rotten reason to give her bad credit.

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.

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

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