Your credit rating is not affected by the one hundred word statement
http://www.articlesdirectory.us/articles/109667/1/Your-credit-rating-is-not-affected-by-the-one-hundred-word-statement/Page1.html
Stuart Hunter
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.
By Stuart Hunter
Published on November 9, 2009
Consumers have the ability to add a one hundred word statement to your credit file in order to explain your side of the story behind negative listings. While the concept is good, unfortunately it is very unlikely that this 100 word statement will have any impact on your ability to get a loan and there is zero chance that it will improve your credit score.
Your credit rating is not affected by the one hundred word statement
Negative listings on credit reports can have a huge impact on your credit rating. A few delinquent 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 large down payment just to qualify for financing. Major blemishes like charged off accounts, 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 do you do when there are negative items on a credit report that should not be there? Credit reporting errors do happen and damaging information gets incorrectly added to peoples' credit reports all the time. And what about negative listings that are accurate but there was a legitimate reason behind them? Is it really fair to require that you live with a low credit rating for up to a decade or more when the damaging listings on your credit reports were completely out of your control?
The Fair Credit Reporting Act (FCRA) gives consumers a few options for dealing with poor credit, and enforcing their right to a fair and accurate credit score. This includes your right to request free copies of your credit reports so you can see what information they contain as well as the right to request verification of 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 referencing your credit reports, lenders will be able to consider the reasons behind these negative listings when considering your loan application.
What makes this statement antiquated is that these days, lenders rarely consider 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 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 a negative item 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 when there are negative items on a credit report that should not be there? Credit reporting errors do happen and damaging information gets incorrectly added to peoples' credit reports all the time. And what about negative listings that are accurate but there was a legitimate reason behind them? Is it really fair to require that you live with a low credit rating for up to a decade or more when the damaging listings on your credit reports were completely out of your control?
The Fair Credit Reporting Act (FCRA) gives consumers a few options for dealing with poor credit, and enforcing their right to a fair and accurate credit score. This includes your right to request free copies of your credit reports so you can see what information they contain as well as the right to request verification of 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 referencing your credit reports, lenders will be able to consider the reasons behind these negative listings when considering your loan application.
What makes this statement antiquated is that these days, lenders rarely consider 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 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 a negative item 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.