100 Words for Better Credit

Nov 13, 2013 by

range of credit scoresDoes your credit report include information that’s dragging down your credit score? Or maybe you disputed what you considered an error on the report but you lost the argument? In either case, the Fair Credit Reporting Act gives you the right to make a 100-word statement on your credit report. Yes, right on the report where anyone reviewing it has the chance to read your words.

Differences Among Reporting Bureaus

You know the Big 3 credit reporting bureaus: Experian, Equifax, and TransUnion. Two of these—Experian and TransUnion—let you add multiple 100-word statements. But you can put only one statement at a time on Equifax’s credit report.

Often the explanation for getting behind on more than one bill is the same—a job loss, for example—so Equifax’s restriction isn’t a huge deal. In fact, if you submit a unique 100-word statement of explanation for each of the three or four (let’s say) credit boo-boos you’ve notched, you may well come off as a serial excuse-maker who can always come up with a good reason not to pay a bill. This isn’t a characteristic much valued by lenders and landlords, so you may be better off keeping your 100-word mouth shut.

What Makes for a Good 100-Word Statement

If you disputed something on your credit report but lost the battle, submitting a statement outlining your side is probably a good idea, if you can do so coherently in 100 words.

If the negative information is legit, a statement can still help you, but you need to work hard to be sure your statement comes off as an explanation, not an excuse, if you know what I mean.

Here are some example 100-word statements to illustrate.

Pretty Bad
I always pay my bills on time but this time I forgot. I called the company and told them I’ll never forget again, but they still reported my bill as past due. I really don’t think that’s fair! Everyone’s entitled to one mistake, aren’t they? I mean, look at the mayor of Toronto, Henry Ford! That guy smokes crack, and I bet he can borrow all the money he wants in Canada!

Bad
If I’d known skipping a couple of credit card payments was going to cause trouble, I sure would’ve kept current instead of taking that trip to Bermuda. But hey, I got an awesome airfare, so I really couldn’t pass it up. I’ve learned my lesson, but now I need a loan to get caught up on my past due debt. But the lender turned me down. She said my credit report doesn’t look so good. I’m not sure what a credit report is, but mine’s really screwing up my life right now.

Really Bad
The bill was due on my birthday. My buddies took me out and bought me a lot of shooters. It took me three days to find my car, so how can I be expected to remember to make an online payment? I really don’t think it’s right that I’m being punished because I celebrated my birthday. Should I have told my buds I can’t go out? C’mon, give a guy a break. I’m going out next year too, but I’m paying all my bills first. And using my girlfriend’s car.

Not Credible
I would have paid this on time, but I’m doing missionary work in Africa. The pay isn’t so good, but I’m teaching little African kids to read and be good Christians. When I return to America in 2015 I should be able to get caught up on my debt. Until then, I think it’s more important that I do God’s work.

Pretty Good
My husband was unexpectedly laid off in early 2009 thanks to the recession. With only my income, we cut back as much as possible and used our savings to stay current, but eventually we had no option but to let this debt slip. My husband was out of work for 11 months. After he got a job, we stuck to a strict budget and put all of our extra money toward getting this debt paid off. We’re current on everything now, and our jobs are secure. And we’ve rebuilt our $5,000 emergency fund.

Would You Consider Adding a Statement to Your Credit Report?

Have you ever added a statement to your credit report? What do you think about the strategy? Might it make a difference to some lenders, or is credit score all that matters?

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  • Travis Pizel

    I’m typically not a big fan of the credit score….but as my wife and I are currently moving through the process of refinancing our home I’m starting to reacquaint myself with why it’s important at times. 🙂

    • I agree, in general people are far too obsessed with their credit scores. That’s probably because companies like Fair Isaac (inventor of the FICO score) realized they could make money by selling credit scores to consumers and so put together an effective marketing plan to whip consumers’ into a competitive frenzy re: credit scores.

      I’ve never checked my credit score. I follow the guidelines for maintaining the best possible credit, then my score is what it is.

  • By paying off one credit card I had a year after I graduated college and paying my student loans on time, I magically had a good credit rating. I haven’t had any instances of delinquency though, which really helps the credit score too.

    • Yes, lenders do not like delinquents, that’s for sure. Congrats on paying off that credit card balance and staying current on the student loans!

  • Fit is the New Poor

    I never knew you could do that! While I have good credit scores, this may come in handy now that my husband is unemployed. Thanks for this info!

  • I’m not overly concerned with my credit score/report. I pay my bills on time every month and have good credit.

  • The only way to increase our credit score would be to take on some debt. We don’t want to do that. The house is paid off and we pay our credit cards in full each month. We have held the current cards for years. Since we don’t plan to take out any more debt, or change jobs, our score of around 750 should suffice.

    • Right on Bryce. The marketing departments of companies that sell credit scores have gotten consumers worked up into such a competitive frenzy about scores that people forget maximizing a score and doing what’s right financially are often NOT the same thing!

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