By David Pilley on September 20, 2010
.jpg.aspx?width=75&height=75) There is no doubt that your credit score is an important factor in your financial life. You might think it consists of just account numbers and balances, but words are also important. In fact, you can write a personal statement that can be added to your credit report. Whether or not it can improve your score is disputable, but the personal statement may point out inaccurate information, or it may affect your chances of getting a future loan.
The personal statement on your credit report can consist of 100 words. Remember that you have credit scores from three companies, and they’re all slightly different. TransUnion and Equifax allow for only one statement on your report, but Experian allows for a general statement, as well as a specific statement for each item.
So now you know the two types of personal statements: general and account specific. An account specific statement will stay on your report until the specific account is removed, while a general statement remains in print for two years. One reason some financial analysts suggest not writing a general statement is because, even if your dispute has been cleared or a negative account has been removed, the statement will be proof of you having past credit issues, and creditors might be wary of issuing you a new loan… if they read the statement, of course.
You will want to write a statement if you think you’re a victim of fraud or if incorrect information appears on your report. These two circumstances will hurt your credit score, so you need to dispute the information if it happens. You can write a statement explaining why you were late on a payment, but this will only help if it is a valid reason. If you have been in the hospital recovering from cancer, your lender will be more lenient with your late payment. (If the lender cares about customer service and more than just money, he/she should, anyway.) If your payment was late because you went on vacation, though, a statement won’t help you one bit.
Writing a personal statement may give you a sense of importance, making you feel bigger than just a number. Unfortunately, many lenders are always thinking in terms of numbers, and your personal statement might not even be read. There are millions of people asking for credit reports, and some lenders just don’t take the time to read content. With the current economic situation, however, lenders aren’t going to give a loan to just anyone. Having numbers and a written statement will give the lender more information, and a written statement may show your knowledge of the credit world.
You have to be choosy with your words if you decide to write a personal statement. It could help, or it could hurt. As a chief rule of thumb, write a statement if information for a specific account is erroneous. And be clear, but concise, because you only get 100 words. |