The Ugly Truth About Making a One Hundred Word Statement

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The Fair Credit Reporting Act (FCRA) provides the American consumer with various options for dealing with derogatory information that has been placed on their consumer credit file by lenders and creditors. One of the many options provided for by the Fair Credit Reporting Act is the ability for all consumers to make a 100 word statement explaining to creditors and lenders the circumstances surrounding the derogatory information associated with any one of the accounts on their consumer credit file. The idea was intended to allow consumers the opportunity to explain their situation so that lenders and creditors would have the opportunity to consider that information prior to making the decision to extend make a loan or extend credit to that consumer.

As the ability to make a 100 word statement regarding derogatory information on your consumer credit file makes fantastic sense in theory, for numerous reasons it does end up working out out to be in the consumers' best interest to do so. In fact, there are more than one reasons why it is better that consumers avoid this option altogether as it will most likely end up damaging their consumer credit file much more than it could help to improve their credit situation.

Creditors follow very specific guidelines when deciding to make a loan or extend credit. Those guidelines have very specific credit score requirements that are required to be met prior to a positive decision can be made to lend money or extend credit. In certain cases a 100 word statement may be taken into account by an underwriter when deciding to lend money or extend credit but, only after the minimum credit score requirement has been met. And regardless how great your justification is for having a derogatory item on your credit file, it will not have a positive influence on your credit score. Once again, it will not have a positive influence on your credit score.

Another crucial issue that should be considered prior to making a 100 word statement regarding derogatory information on your consumer credit file is that you only get one chance to do it correctly. The statement you make will become a part of your consumer credit report and cannot be amended, revised or removed should you choose to at a later time. The most crucial point that must be understood is that by making the choice to make a 100 word statement, you run the risk of making it almost impossible to remove the derogatory item at a later time, whether it is by yourself or a professional credit repair organization.

As it will not improve your credit score and only make it more difficult for the derogatory credit account to be removed or resolved at a later time, making a 100 word statement is usually a bad idea. One of the most effective ways to prevent derogatory credit accounts from hurting your credit score is to have them resolved from your personal credit report through professional credit report repair. Should you decide to take action and seek the professional help of a credit repair organization, it is very important to understand that all credit restoration organizations are not created equal. Be sure to read my article that explains the many different types of credit restoration organizations that make up the industry and what to look for when choosing one that best suits your needs.

Article Source: http://depositarticles.com/

Alexander Wright is a professional article writer specializing in writing articles for Credit Restoration Bureau in the areas of credit repair and credit restoration.

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