The One Hundred Word Statement Will Not Repair Your Credit Rating
- By Lexington Law
- Published 11/9/2009
- Finance
- Unrated
Lexington Law
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.
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Negative items on your credit reports have some of the biggest effects on your credit rating. A handful of late payments can make the difference between getting approved for a good interest rate on a mortgage or other type of loan and being required to make a large down payment in order to even qualify for financing. Major derogatory items like charged off accounts, repossessions, and bankruptcies 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 do you do if there are negative listings on a credit file that should not be there? Errors do happen and negative listings are incorrectly added to consumers' credit reports very frequently. And what about negative listings that are accurate but there was a legitimate reason behind them? Is it fair to have to deal with a bad credit score for up to 10 years when the blemishes in your credit history were essentially out of your control?
The Fair Credit Reporting Act gives consumers a few options for dealing with bad credit, and enforcing their right to a fair and accurate credit score. This includes your right to order free copies of your credit reports 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 consider the reasons behind these negative listings when considering a loan application.
What makes this statement antiquated is that these days, lenders rarely look at the individual items 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 most interested in your credit score, which does not take the one hundred word statement into account. No matter how good your justification is for having negative listings on your credit reports, your credit score will remain unchanged.
The only way to prevent negative items from lowering 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 do you do if there are negative listings on a credit file that should not be there? Errors do happen and negative listings are incorrectly added to consumers' credit reports very frequently. And what about negative listings that are accurate but there was a legitimate reason behind them? Is it fair to have to deal with a bad credit score for up to 10 years when the blemishes in your credit history were essentially out of your control?
The Fair Credit Reporting Act gives consumers a few options for dealing with bad credit, and enforcing their right to a fair and accurate credit score. This includes your right to order free copies of your credit reports 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
What makes this statement antiquated is that these days, lenders rarely look at the individual items 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 most interested in your credit score, which does not take the one hundred word statement into account. No matter how good your justification is for having negative listings on your credit reports, your credit score will remain unchanged.
The only way to prevent negative items from lowering 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.