Your Credit Rating is Not Affected by the One Hundred Word Statement
- By Stuart Hunter
- Published 11/9/2009
- Finance
- Unrated
Stuart Hunter
Providing credit repair services since 1991, Lexington Law has helped over 500,000 clients legally take on their credit. Last year alone, Lexington Law helped clients remove over 600,000 negative items from their credit reports.
View all articles by Stuart Hunter
Negative listings on your credit reports make some of the largest hits to your credit score. A handful of late payments can be the difference between getting a favorable interest rate on a loan and having to make a large down payment in order to even qualify for financing. Major derogatory items like charged off accounts, liens, and foreclosures have the potential to drop your credit score so much that you will have difficulty getting approved for credit, regardless of the terms.
So what's a person to do when there are negative items on a credit report that shouldn't be there? Credit reporting mistakes do happen and damaging information gets incorrectly added to consumers' credit reports very frequently. And what about negative listings that do describe actual events but there was a perfectly good reason behind them? Is it fair to have to live with a poor credit score for up to 10 years or more when the damaging listings on your credit reports were essentially out of your control?
The Fair Credit Reporting Act (FCRA) provides consumers with a few options for dealing with bad credit, and enforcing their right to a fair and accurate credit score. This includes your right to request free copies of your credit reports so you can see what information they contain as well as the right to dispute items on your credit reports that you feel may be inaccurate, untimely, misleading, incomplete, ambiguous, unverifiable, biased or unclear.
Another antiquated option you have as a result of the Fair Credit Reporting Act is the right to add a 100 word statement to your credit reports explaining to creditors the circumstances behind negative items on your credit reports. The idea is that when looking at your credit reports, lenders will be able to take into account the reasons behind these negative listings when considering your loan application.
What makes this statement antiquated is that these days, lenders rarely look at the individual listings in your credit reports. In fact, they may never see your reports at all so your carefully crafted 100-one hundred word statements would never even be read.
On top of that, lenders are primarily interested in your credit score, which does not take the 100 word statement into account. No matter how reasonable your justification is for having negative items on your credit reports, your credit score will remain unchanged.
The only way to prevent negative items from affecting your credit score is to have them removed from your credit report. One option people have for attempting to do this is the credit bureau dispute described in the Fair Credit Reporting Act. Additional credit repair options are made available through a number of other consumer protection acts targeted towards creditors and collections agencies.
So what's a person to do when there are negative items on a credit report that shouldn't be there? Credit reporting mistakes do happen and damaging information gets incorrectly added to consumers' credit reports very frequently. And what about negative listings that do describe actual events but there was a perfectly good reason behind them? Is it fair to have to live with a poor credit score for up to 10 years or more when the damaging listings on your credit reports were essentially out of your control?
The Fair Credit Reporting Act (FCRA) provides consumers with a few options for dealing with bad credit, and enforcing their right to a fair and accurate credit score. This includes your right to request free copies of your credit reports so you can see what information they contain as well as the right to dispute items on your credit reports that you feel may be inaccurate, untimely, misleading, incomplete, ambiguous, unverifiable, biased or unclear.
Another antiquated option you have as a result of the Fair Credit Reporting Act is the right to add a 100 word statement to your credit reports explaining to creditors the circumstances behind negative items on your credit reports. The idea is that when looking at your credit reports, lenders will be able to take into account the reasons behind these negative listings when considering your loan application.
What makes this statement antiquated is that these days, lenders rarely look at the individual listings in your credit reports. In fact, they may never see your reports at all so your carefully crafted 100-one hundred word statements would never even be read.
On top of that, lenders are primarily interested in your credit score, which does not take the 100 word statement into account. No matter how reasonable your justification is for having negative items on your credit reports, your credit score will remain unchanged.
The only way to prevent negative items from affecting your credit score is to have them removed from your credit report. One option people have for attempting to do this is the credit bureau dispute described in the Fair Credit Reporting Act. Additional credit repair options are made available through a number of other consumer protection acts targeted towards creditors and collections agencies.