The One Hundred Word Statement Will Not Repair A Bad Credit Rating
- By Lexington Law
- Published 11/9/2009
- Finances
- 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 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 mortgage or other type of loan and being required to make a substantial down payment in order to even qualify for financing. Major derogatory items like charge-offs, liens, and foreclosures have the potential to drop your credit score so much that you will have difficulty getting approved for credit at all.
So what is a person to do when there are damaging items on a credit report that shouldn't be there? Mistakes do happen and damaging information gets incorrectly added to peoples' credit reports all the time. And what about negative listings that do describe actual events but there was a perfectly good reason behind them? Is it really fair to have to deal with a poor credit rating for up to a decade or more when the negative items on your credit reports were essentially outside your control?
The Fair Credit Reporting Act (FCRA) provides consumers with a few options when 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 request verification of any 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 this act is the ability to add a one hundred word statement to your credit reports explaining to creditors the circumstances behind negative items on your credit reports. The idea is that when referencing your credit reports, lenders will be able to take into account the justification 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 meticulously 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 listings 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 is a person to do when there are damaging items on a credit report that shouldn't be there? Mistakes do happen and damaging information gets incorrectly added to peoples' credit reports all the time. And what about negative listings that do describe actual events but there was a perfectly good reason behind them? Is it really fair to have to deal with a poor credit rating for up to a decade or more when the negative items on your credit reports were essentially outside your control?
The Fair Credit Reporting Act (FCRA) provides consumers with a few options when 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 request verification of any 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 listings in your credit reports. In fact, they may never see your reports at all so your meticulously 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 listings 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.