Adding a 100-word statement to your credit report
One tactic that many consumers use to ensure that their credit reports are accurate and up-to-date is to add a 100-word statement to the report. We routinely recommend this action as part of our debt counseling advice.
Some critics warn against the 100-word statement. They think consumers who write a statement are handing collectors the verification they need to pursue debt collection, or are simply wasting their time. We don’t agree with the critics who oppose the use of a 100-word statement on a credit report. If anything, a well-written statement sends a message to collectors that the consumer understands his/her rights and is prepared to take advantage of them.
True, some creditors will simply ignore everything but one’s credit score when reviewing a credit profile (and a 100-word statement won’t affect your score), but for the creditors who look beyond credit scores and evaluate a consumer’s report fully, a 100-word statement can help provide context for the raw data in the report.
The statement itself is allowed as part of the Fair Credit Reporting Act, and may be used for any topic the consumer wishes. One might explain a delinquency or dispute, or describe the circumstances that led to a particular account status.
Our debt counseling advice is to use the 100-word statement when it will help a creditor, lender, landlord, employer, or anyone else who pulls your credit report understand anything that might otherwise make them hesitate to grant you credit, employment, housing, etc. based on your report.
There are many circumstances that are temporary, but have a lasting negative impact on one’s credit. Illness, divorce, a dispute with a particular creditor… these things can clarify that you are not a high-risk consumer, but that you experienced a temporary setback that is now behind you. Similarly, if you place a fraud alert on your report due to something like identity theft, a 100-word statement can help clarify for a credit report reviewer that you’ve got the situation under control.
Of course, not all statements are advisable. A statement that confirms for the reviewer that you are irresponsible or unreliable will do more harm than good. You’ll also want to be careful how much you share; there are things that one might explain to a creditor that you wouldn’t want a potential landlord or employer to know.
Our free Consumer Guide to Good Credit contains more information about 100-word statements, including sample statements and instructions on how to add this kind of notation to your credit report. You can also read more about your rights, including the Fair Credit Reporting Act. You can get the guide for free from our Educational Guides and Downloads page.
Call us any time for free, confidential debt counseling. We have NFCC-certified counselors available to help with budgeting and credit debt advice.