Hundred word consumer statement
The fair credit reporting act allows you to add a consumer statement on your credit report against items that you do not agree with. These are usually items that you disputed but were not resolved according to your satisfaction. This provision is found in section 611 of the Fair Credit Reporting Act.
The value of this consumer statement is that it lets the future creditors know that you do not agree with a certain negative information on your credit file when they’re reviewing it for the sake of your credit application. At this point you can provide them with additional details and satisfy their query by providing documents to support your own claim. However, the consumer statement has no effect on a credit rating. Nonetheless, many consumers are encouraged by the credit reporting agencies to add a consumer statement specially when they see that you tried going to have something updated on your credit vote.
In essence, the hundred word consumer statement is the a kind of a compromise and meant to appease you.
The only benefit is that it gives future creditors for warning that some negative items on your credit history is not accurate according to.
However, there are certain accounts and certain kind of entries against which listing 100 word dispute consumer statement is helpful.
- Medical bills that are showing a collection account because insurance has not covered them yet.
- A bankruptcy that was dismissed but your debts were not discharged.
- Save your account changes resulting from identity theft, that, major medical problems or divorce.
A hundred word consumer statement is particularly effective next to a medical debt. Many times a medical visit to a procedure that should have been covered by insurance is not paid because of some delay in the process. It can be a small error such as the use of another family member’s name or a Social Security number typo. So if the insurance does not correct the mistake and pay the bill soon, the hospital or the doctor may send the overdue bill to the collection agency within just a few weeks. This may result in the collection account being listed on your credit file. The good news is that when the insurance company pays the bill, the law requires the collector to remove the account from your credit report immediately.
Three reasons why submitting a 100 word consumer statement is ineffective
- The consumer statement does not affect your credit score or your credit worthiness.
- Many creditors actually ignore the hundred word statement on your credit file.
- You will have to explain to a potential creditor the entry on your credit file anyway. The hundred word statement is only of value if you have physical documented proof of why your side of the story regarding the dispute is correct.