Credit Repair - Adding an Explanatory Statement to Your Credit Report - Effective Or Not?

In addition to disputing incorrect information, you also have the right to add information to your credit report that makes you look more credit worthy. If you have been unable to resolve a dispute to your satisfaction or remove a blemish on your credit report, you can submit a brief explanatory statement about the item and have it added to your file. The credit bureau must then include your statement, or a summary of it, in any credit report released with the designated item.

It is wise to limit such an explanation to 100 words or less, keeping it clear and concise. The credit bureau can help you write it, but keeping it brief increases the likelihood it will be passed along unedited. If your statement is long it will probably just be summarized and it may lose something in the translation. So keeping your statement short and sweet will ensure your message gets across as you intended.

Credit reporting agencies are only required to include a statement in your file if you are disputing the completeness or accuracy of a particular item. They are not required to do so just so you can explain reasons for not paying your debts. However, if you feel you have extenuating circumstances you can ask for such an explanation to be added to your file, usually for a fee.

Upon your request, the credit reporting agencies must then provide the statement or summary to anyone you specify who received a copy of your report within the past six months, or two years for employment purposes. This service is free if you request it within 30 days after the agency gave you notice of the results of a relevant investigation. Otherwise, it will probably cost you $10. for each report sent out.

An explanatory statement, however well written, may not be the best course of action to effectively communicate your position. For one thing, a convincing case is hard to make in such a brief statement and it may be better to simply explain your situation verbally when the need arises. The reality is, many credit reports are never fully read by creditors and credit-scoring programs totally ignore these statements.

You can't assume that an explanatory statement added to your credit report will be effective or even read by creditors. Such statements are often ignored when making credit decisions and communicating your case directly will probably yield better results.

The author is a business writer specializing in personal finance. He has an MBA and is currently assisting TooManyPaydayLoans.com as a financial advisor. Visit this website for unbiased information about Payday Advance Loans or if you are looking for a reputable Payday Loan Store.

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