Credit Restoration Handout


Use A Consumer Statement to Explain Negative Credit History


You can't always erase negative credit information from a credit report. You can file a statement explaining the situation leading to your bad credit. Send the credit bureau a Consumer Statement of 100 words or less, which is then included in your credit report and sent to any prospective creditor. A Consumer Statement gives other creditors your side of the story and you can greatly mitigate the damage from negative credit information. It is best to add such a statement only if you've exhausted all other remedies. If you do add a statement, it will remain on your credit report for two or three years and then be deleted by the credit bureau.

A Consumer Statement can considerably soften an entry that you filed Chapter 13 bankruptcy, when you explain that you eventually paid your creditors 100 percent of what you owed. Or, a rash of late-payments may be explained by documenting an illness that prevented you from working. This becomes even less a credit problem if your Consumer Statement further points out that you have paid on time before and after the event.

According to the Fair Credit Reporting Act, the credit bureau should publish the entire statement. Credit bureaus cannot shorten statements that are less than 100 words. If the Consumer Statement was less than 100 words, and has been inadvertently shortened by the credit bureau once it appeared in your file, then it is your right to insist that the credit bureau publish the entire statement. If the Consumer Statement is longer than 100 words, the credit bureau must then help you summarize the statement to be within the 100-word limit.

Demand that the statement be incorporated as part of your credit report, and become attached to it, and not just “in your file”. Creditors will only consider the statement if it is on the report they read. Refuse to select a "prewritten" statement. You have a legal right to draft your own personal Consumer Statement.


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Use A Consumer Statement to Explain Negative Credit History
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