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Let Your Credit Report Tell Your Side of the Story

Posted on July 2, 2011

Credit report disputes aren’t always successful. Sometimes you believe something shouldn’t appear on your report, but the bureau disagrees and continues to report the item you disputed. If you can’t get an item taken off your report, you can tell your side of the story.

Your Right to a Personal Statement

The Fair Credit Reporting Act, the law that covers credit report disputes, gives you the right to add a 100-word personal statement to your report. You can use this brief paragraph to explain why an entry is has been listed on the report. For example, a fraudulent account may have been reported in your name, but the bureaus refuse to remove it because the card issuer continues to say that it belongs to you. Your 100-word statement would explain the identity theft and state that you tried to dispute it but were unsuccessful.

Personal statements don’t necessarily have to explain errors on your report. They can also be used to explain why you fell behind on payments, e.g. a long period of unemployment or an injury. The personal statement can be used to explain that you aren’t a deadbeat and you have a legitimate reason for falling behind on your payments.

Make sure your personal statement doesn’t cast you in a bad light. You don’t want to say something like “I was young and didn’t realize late payments would affect me.” That type of statement probably won’t give the lender a good impression about your ability and willingness to repay a loan or credit card balance.

What do Personal Statements Impact?

The personal statement doesn’t impact your credit score, so adding it to your credit report won’t give you any credit score points. It won’t hurt your credit score either. The statement does come into play when a business manually reviews your credit report.

A personal statement also won’t show up in an automatic review of your credit report. Many lenders have systems that simply give them a “yes” or “no” on your credit report. The system may summarize your positive and negative accounts, but these computerized credit checks don’t show the lender your full credit report or show your personal statement.

However, if the lender does decide to manually review your credit report, perhaps to take a better look at your accounts, that’s when the personal statement comes into play.

Personal statements can backfire. For example, they can outlive the negative information they’re intended to explain. So, your personal statement may give an explanation for a late account that’s not even on your credit report. The lender sees the personal statement and realizes you were once late on an account. They would never have known if you didn’t have the personal statement on your credit report.

You can add a personal statement to your credit report by contacting the three bureaus. Only add the personal statement to the credit report that contains the error, not all three credit reports if they don’t all contain the error you want to explain. You can also remove personal statements when they’re no longer valid or if you decide you don’t want the statement on your report anymore.

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