The Wrong Way to Dispute Your Credit Report
Posted on August 8, 2008
Filed Under Cars and Trucks |
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.
In paragraph number two of a credit bureau dispute response the bureaus encourage you to add a 100-word consumer statement to your report. This is where many people add a short essay on why they deserve 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.
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.
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.”
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.
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.
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. There is no reason for them to conduct an investigation. Finally, you have put yourself into a category of consumers that potential creditors avoid. Any potential creditor may avoid giving you credit out of fear that you will likewise default on payment should you run into a rough financial patch in the future.
If a creditor does not read your statement, then nobody will. Most applications are reviewed digitally and so the 100-word statement serves no purpose other than a weapon credit bureaus use against you.
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.
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