100 Words That Can Change Your Credit History

Looking at your credit report may be something you'd rather not do, especially if you've recently experienced a financial rough patch. However, knowing what's in it is important, especially if you're planning on a major purchase or applying for a new job. Everyone is entitled to one free copy of their credit report each year, which you can get at annualcreditreport.com.

What you might not know is this: If your credit history is rocky, you don't have to let the report alone tell your story. Under the Fair Credit Reporting Act, all three credit-reporting agencies (Equifax, Experian and TransUnion) in the United States are required to allow consumers to attach a 100-word statement to their reports.

There is no numerical value associated with such a statement, so it won't affect your actual credit score. If you've had a long history of credit problems or lapses, the statement probably can't do much to help you either.

However, if you have had a specific problem or issue with your credit, a statement can help reassure a lender or creditor who is reading your report. Also, if there is an inaccuracy which is taking a long time to clear up, you might benefit from clarifying a specific situation.

"An automated credit report review will not take your statement into account at all," says Virginia Sullivan, the director of education for Bills.com. "But in the event of a manual review or a follow-up request, it makes sense to at least outline your case using this tool in case it finds a receptive audience."

A statement will stay on your credit reports for as long as you leave it there. If you want it to be attached to all your credit reports, you'll need to send it separately to all three credit-reporting companies.

Keep in mind that 100-words boils down to three or four sentences. A clear and concise submission is essential. Sample letters on CreditCards.com show how to write a letter that addresses identity theft, a medical emergency, or an error or dispute with a business.

Tips for Writing Your Statement

Be specific. Use dates, names, and other supporting evidence to explain clearly what happened and why it led to your credit being dinged. Sullivan gives this an example statement: "Company X claims they never received payment. I mailed the check on X date and have a copy of the canceled check from my bank. My 3 calls between X date and X date to service representative X have gone unreturned."

Avoid emotion. If a tragedy in your life has led to missed payments for bills, explain simply the nature of the event with the facts and circumstances. You may not want to give potential future landlords a sob story that could negatively influence their decision.

Don't make excuses. No need to get into a long-winded explanation about how your ex-boss was a jerk and that's why you lost your job, or that your brother-in-law never paid you back the money he owed you.

Proofread carefully. Your 100-word explanation will stay on your credit report unless you ask for it to be removed. Everyone who accesses the report will be able to read it, including future employers. Poor spelling or bad grammar won't derail your credit, but it might not help your case either.

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Comment by Malcolm X on June 2, 2011 at 4:47pm: The average college graduate will spend the next twelve years paying off their student loans. You know how many college graduates work in starbucks? This makes it hard to even think about starting your own business, because you come out the gate owing money. The rich make sure you will always work for them. And they even make it hard to discharge student loans when you file bankruptcy.

I have filed bankruptcy twice. And they still keep offering and approving me for credit cards and a mortgage. The interest rate is high, but if you really want to get in debt they will always let you if you have a stable job and income.

Comment by Malcolm X on June 2, 2011 at 1:51pm: My situation might be a little different. i always had side hustles. When I bought my last car I saved money for about four years and was able to put 17,000 down. the dealer was mad because he thought I was going to finance the whole thing through GMAC. That's how they really make their money. I lied and told them i was going to put 1500 down to get a good deal. In five more years I plan on retiring and going south. Many of my coworkers can't retire because they are paying off mortgages car notes and other debts.

Maybe I'm different but I cant see myself getting ahead owing somebody money, I'd rather have people owe me.
I have life insurance so my kid will inherit some money, but the best thing I think that I can leave her is the knowledge of how to earn money and have some financial freedom.

Jews teach their children to loan money but we teach ours to borrow. who do you think benefits from this?
I'm not saying a good credit score a bad thing. But like I said I had a low credit score but one of my hustle was paying so good at one time I was able to get a 13,000 business loan from GE Financing it was the worst thing I ever did. The business fell off right after I got and spent the loan. i was tempted to sell drugs to pay them off. They don't care if I had fell on hard times all they wanted was their money. They threatened to garnish my day job paycheck.

Comment by Malcolm X on June 1, 2011 at 10:42pm: yes get good credit so you can buy things on credit and then owe double what those things cost. Get a good credit score so the bank can give you a mortgage that they know you cant handle then they foreclose on your house and sell it to some one else collect some money from then and then do the same to him.

F*** that. I got bad credit but don't owe nobody nothing. Just the rent and light bill.

Comment by gloria mcwilliams on June 1, 2011 at 3:17am: informative

Comment by kcrunchone on May 31, 2011 at 9:17pm: The crooks very often win and get away with the crimes and the jail time they receive if they are ever caught works out to their advantage. Identity theft is a career and they make good money. It took me 12 years to get my name back to a decent standing and it is still not all in tact the way it would have been if not for the a******* that screwed me over. They sell a working SS# like nothing and pass it along for sport. Be careful people guard your credit with all your efforts