Psychosis #3: Including a credit statement is helpful.

What sheep they believe us to be. In the early 1970s when the Fair Credit Reporting Act first gave Americans the right to include such statements on their reports, life was different. Prospective creditors still actually perused consumer files with authentic human eyeballs. (Read Psychosis #2.) So in those halcyon days of yore, a plaintive comment placed in the report by the consumer herself might have made a difference at mortgage time.

No more.

Nowadays the 100-word statements can only harm the consumer. First, as we've discussed, such personal statements are essentially never read by potential creditors anyway since the credit score is the usual qualifying determinant. Second, those statements only make it more difficult to embark upon a credit repair effort later because they serve to confirm what's already there. So, for example, let's say a consumer attaches a statement that reads something like this: "These late payments were made only because I was suddenly laid off (or sick), but that unfortunate situation changed very quickly, and we have never been late with this or any other account since." That may sound responsible, but unfortunately it says only this in reality: "NOTE: yes I really was late paying these accounts. Plus I'm not smart enough to have an emergency fund to cover basic minimum payments if something goes wrong financially. Therefore, I am a bad credit risk."

Even worse, let's say a consumer subsequently learns something about credit reporting and decides to engage Lexington Law to help confront such matters legally and technically. Whoops. Any new challenges will likely be dismissed because there's no need to even take another look: After all, the answer resides right within the consumer's statement which admits fault. Remember that extenuating health or employment circumstances are viewed as little more than lame excuses within the consumer credit industry in any case.

For these reasons, consumer advocate old-timers practically always advise that the first items to be disputed are those silly 100 word statements if any were ever inserted. The Credit Insider heartily concurs with that philosophy.

Next > Psychosis #4: Negative items must remain for 7 years.


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