Credit Cards Article

Credit Report Dispute - Avoid This Mistake

Author: Matt Douglas

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 may be difficult to resist the urge to proclaim your innocence by way of a consumer statement. You may feel the need to explain that the bad credit simply was not your fault or beyond your control.

Do not fall into the trap of adding a consumer statement to your credit. It is almost never a good thing.

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.

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.\"

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.

Her inability to make payments is seen as a sign of weakness and/or irresponsibility. They believe that she should have emergency money to pay bills during times of emergency.

The 100-word statement also has additional hidden dangers. For instance, adding such a statement confirms your guilt. It is direct proof that you were late on those payments. Moreover, you put yourself on perilous footing should you decide to hire a credit correction law firm in the future. The credit bureaus will ignore any future disputes on your behalf because you have already admitted guilt.

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.

In sum, ignore the temptation to tell your side of the story. Resist the urge to \"justify\" your being late on that credit card bill or car payment. Steer clear of adding the deadly 100-word consumer statement.

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