The One Hundred Word Credit Statement

Posted 2/12/2010 10:52:34 AM in Credit Report
If you dispute an item on your credit reports and after conducting an investigation the credit bureau you are disputing with does not delete the item, you have the right to submit a one hundred word statement to be added to their credit reports. This statement is supposed to be a way for you to plead your case to creditors looking at your credit reports.

According to the Fair Credit Reporting Act:
"If the reinvestigation does not resolve the dispute, the consumer may file a brief statement setting forth the nature of the dispute. The consumer reporting agency may limit such statements to not more than one hundred words if it provides the consumer with assistance in writing a clear summary of the dispute."
Many consumer advocates claim that this one hundred word credit statement can make a difference between being denied credit and getting a loan. While this may have been the case 30 years ago, it certainly is not the case today. Personal statements such as these are almost never read by creditors. Creditors have better things to do with their time than pore through your entire credit report in order to determine what sort of a credit risk you are. Instead, they simply look at your credit score and assume the Fair Isaac folks have accurately converted your credit risk into a single numerical value.

Adding a credit statement will do nothing to help your cause and may actually hurt you in the long run. Typically, a person's one hundred word credit statement says something like "these payments were not on time because I was laid off from my job, but I was able to get a new job quickly and have been on time with all of my payments since then". Since no one reads this message and since your credit score does not take into account what it says in these credit statements, there is no benefit is wasting your time adding it.

Not only is it a waste of time to add a credit statement, but it may come back to bite you. If in the future you decide to dispute the item again with the credit bureaus, they will not even need to perform an investigation. All they have to do is look at your one hundred word statement where you incriminated yourself. Your statement may be designed to tell creditors that there were extenuating circumstances, but all it really does is tell the credit bureaus that you were truly late in making your payments. To them, the reason behind your lateness is not important.