Have you ever checked your credit report and you felt like you wanted to clarify a few things for whoever reads it? It’s called a consumer statement, it is essentially a note you can include in your credit report. Consider it as your opportunity to share your side of the story with lenders. Whether you missed a payment due to illness or there’s an error on your report that is not your fault, the consumer statement allows you to explain. 

What is a Credit Report

A credit report is a document that financial institutions and other lending businesses refer to when determining whether they should extend loans to you, issue credit cards, or even approve apartment rentals.

Your credit report contains a lot of information. It includes details about your loans, credit cards, and how punctual you are with bill payments. A positive credit report makes it easier to secure loans with good terms.

It’s super important to know what’s on your credit report because sometimes mistakes happen, and you don’t want those messing up your chances of getting a loan or a new credit card. Plus, checking your report can help you catch sneaky stuff like identity theft early on. So, keeping an eye on your credit report is important.

What is a Consumer Statement?

A consumer statement is like a short note you can put on your credit report. Imagine you can leave a message for anyone who checks your credit, telling them something important about your financial situation. This statement lets you explain things that might not look great on your report, like why you were late on a payment once or twice. 

It’s pretty cool because it lets you tell your side of the story. Maybe you had a rough patch because of a job loss or a medical emergency. This little note is your chance to say, “Hey, there’s a reason for that,” and it can help lenders understand your situation better. 

But remember, it’s a short note, not a long story. You’ve got to keep it simple and to the point. Meanwhile, not everything needs a consumer statement. It’s just for those special situations where a little explanation could make a big difference.

Reasons to Add a Consumer Statement

First, if something went wrong and it wasn’t your fault, like if you were sick and missed a payment, a consumer statement can explain that. It’s your way of saying, “I usually pay on time, but this one time, I had a good reason.”

Another reason is to clear up misunderstandings. Maybe your report shows you owe money, but you’ve already paid it off. A consumer statement can help set the record straight.

Also, if you’ve been a victim of identity theft, a consumer statement can alert lenders.

How to Add a Consumer Statement

1. Check Your Report: First, get a copy of your credit report from either Equifax or TransUnion. You need to see what’s in your report so you know what you want to explain.
2. Write Your Statement: Keep it short and captivating, but don’t exaggerate. You’ve got 100-200 words, so make every word count. Explain your situation clearly and calmly. No need for fancy words, just the facts.
3. Contact the Credit Bureaus: You’ll usually do it online or by mail. Find the instructions on their websites.
4. Send It In: If you’re mailing your statement, make sure to include your personal, so they know it’s you. If you’re doing it online, follow their steps to upload.
5. Wait for Confirmation: After you send your statement, the credit bureau will add it to your report. They might send you a confirmation, so keep an eye out for that.

Pros of Adding a Consumer Statement

1. Your Side of the Story: It lets you explain your situation. If there’s a good reason for a late payment or any issue, your statement can tell lenders why.
2. Clarification: Sometimes your report isn’t clear. A consumer statement can help clear up any confusion about debts, payments, or identity theft issues.
3. Alert to Lenders: If you’ve been a victim of fraud or identity theft, a statement can warn lenders to double-check before opening new accounts in your name.

Pros of Adding a Consumer Statement

1. Limited Impact: Not all lenders read these statements. Some might just look at your credit scores and skip over your personal notes.
2. Attention to your negative report:  By adding a statement, you might draw more attention to the negative parts of your report. It’s like pointing out a stain on your shirt; once you point it out, that’s all people see.
3. Short: You have to keep it brief, usually under 200 words. It’s tough to tell a complex story in such a tight space.

Alternatives to Consumer Statements

1. Dispute Errors Directly: If there’s a mistake on your credit report, you don’t always need a consumer statement. You can dispute the error directly with the credit bureaus. It’s their job to check it out and fix any mistakes.
2. Credit Counseling: Sometimes, it’s helpful to talk to a debt expert. Credit counselling agencies can give you advice on managing your debts.
3. Build a Positive Credit History: Pay bills on time, keep credit card balances low, and use a mix of different types of credit to boost your credit score over time.

Final Thoughts

Are you dealing with overwhelming debts? Or you know someone who is battling with debt? Worry no more! You can speak with one of our debt experts at EmpireOne Credit to get assistance. Your debt can be reduced by up to 80%, and interest will stop immediately. Call us at (416) 900-2324 to schedule a free consultation with us. Being debt-free feels good!