The Truth about Consumer Statements
Loren McCray
August 04, 2008
There is probably at least one thing on everyone´s credit reports that they wish conveyed their version of the incident.
The Fair Credit Reporting Act (FCRA) allows everyone to submit up to one-hundred words explaining their version of the incident. People that reside in Maine can write as many as two-hundred words.
The problem with consumer statements is that they are a complete waste of time.
Submitting a consumer statement on your credit report is about as useful as a swimming pool at the North Pole.
Consumer statements are total waste of time because most banks do not even look at credit reports anymore. Most banks do not even pull the entire credit report.
Banks only pull specific portions of credit reports. The "consumer statement" segment is almost NEVER pulled.
The reason is that Fair Isaac streamlined the entire loan process so banks won't have to invest time reviewing credit reports.
For example, think about a large bank like Bank One, Washington Mutual or Wachovia. These banks receive scores of applications every single day. You'd need an army of people to review each credit report by hand.
Now imagine how uneconomical it would be for the bank to review thousands of consumer statements and also have to figure out how to interpret them as part of the overall credit application.
Banks simply look our FICO credit scores, to make a credit decision. FICO scoring is the reason we can be approved for credit on your favorite website, over the telephone, or even at a department store in mere seconds.
It takes five seconds for them to get your FICO credit scores and another five seconds to offer you store credit. Now that's fast!
Remember that every bank is different when it comes to credit scoring. Many banks use only your FICO credit scores to make a credit decision. Some banks use your FICO credit scores as one piece of their credit decision.
Consumer Statements May Even Hurt You
Consumer statement can even corroborate negative information on a person's credit reports.
Here are some actual real-life examples...
"...The reason I was late paying the bill was due to the fact that I..."
"...I normally pay my bills on time. But last month I didn´t have the money, so I..."
"...the phone company raised my monthly fees and I shouldn´t have to pay it…"
"...I went to Hawaii and I forgot to pay Citibank so..."
These statements have essentially done the credit reporting agencies' jobs for them. They've just
confirmed that the negative information is true.
How to Remove an Existing Consumer Statement
It is as easy as asking for it to be removed. You submitted it, you have the right to remove it.
You can write each credit reporting agency a simple letter. Here are their mailing addresses:
Equifax® Information Services LLC
PO Box 740241
Atlanta, GA 30374
TransUnion™
PO Box 2000
Chester, PA 19022
Experian®
PO Box 2104
Allen, TX 75013
Remember the Following if You Have a Dispute with a Bank
1. No matter who is right, if there is a possibility that the negative information will be end up on
your credit reports—you need to suck it up and pay up before it gets reported. This is critical because
if it gets on your credit reports, it will stay there for the next seven years. Pay whatever they say
you owe. Then hire an attorney to sue them, or take it to small claims court.
2. Using a consumer statement to tell the credit world your side of the story is a bad move. You don't
want to verify negative information and do the credit reporting agencies' jobs for them.
3. Consumer statements don't help your scores. You can be as right as it gets and it won't matter. A
consumer statement has no positive impact on your FICO credit scores. It simply doesn't.
Focus on what helps your scores. Everything else is just a waste of your time.
The Fair Credit Reporting Act (FCRA) allows everyone to submit up to one-hundred words explaining their version of the incident. People that reside in Maine can write as many as two-hundred words.
The problem with consumer statements is that they are a complete waste of time.
Submitting a consumer statement on your credit report is about as useful as a swimming pool at the North Pole.
Consumer statements are total waste of time because most banks do not even look at credit reports anymore. Most banks do not even pull the entire credit report.
Banks only pull specific portions of credit reports. The "consumer statement" segment is almost NEVER pulled.
The reason is that Fair Isaac streamlined the entire loan process so banks won't have to invest time reviewing credit reports.
For example, think about a large bank like Bank One, Washington Mutual or Wachovia. These banks receive scores of applications every single day. You'd need an army of people to review each credit report by hand.
Now imagine how uneconomical it would be for the bank to review thousands of consumer statements and also have to figure out how to interpret them as part of the overall credit application.
Banks simply look our FICO credit scores, to make a credit decision. FICO scoring is the reason we can be approved for credit on your favorite website, over the telephone, or even at a department store in mere seconds.
It takes five seconds for them to get your FICO credit scores and another five seconds to offer you store credit. Now that's fast!
Remember that every bank is different when it comes to credit scoring. Many banks use only your FICO credit scores to make a credit decision. Some banks use your FICO credit scores as one piece of their credit decision.
Consumer Statements May Even Hurt You
Consumer statement can even corroborate negative information on a person's credit reports.
Here are some actual real-life examples...
"...The reason I was late paying the bill was due to the fact that I..."
"...I normally pay my bills on time. But last month I didn´t have the money, so I..."
"...the phone company raised my monthly fees and I shouldn´t have to pay it…"
"...I went to Hawaii and I forgot to pay Citibank so..."
These statements have essentially done the credit reporting agencies' jobs for them. They've just
confirmed that the negative information is true.
How to Remove an Existing Consumer Statement
It is as easy as asking for it to be removed. You submitted it, you have the right to remove it.
You can write each credit reporting agency a simple letter. Here are their mailing addresses:
Equifax® Information Services LLC
PO Box 740241
Atlanta, GA 30374
TransUnion™
PO Box 2000
Chester, PA 19022
Experian®
PO Box 2104
Allen, TX 75013
Remember the Following if You Have a Dispute with a Bank
1. No matter who is right, if there is a possibility that the negative information will be end up on
your credit reports—you need to suck it up and pay up before it gets reported. This is critical because
if it gets on your credit reports, it will stay there for the next seven years. Pay whatever they say
you owe. Then hire an attorney to sue them, or take it to small claims court.
2. Using a consumer statement to tell the credit world your side of the story is a bad move. You don't
want to verify negative information and do the credit reporting agencies' jobs for them.
3. Consumer statements don't help your scores. You can be as right as it gets and it won't matter. A
consumer statement has no positive impact on your FICO credit scores. It simply doesn't.
Focus on what helps your scores. Everything else is just a waste of your time.