Credit help service

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 truth is that yes, so long as you follow the advice, commit your time, and pay the asking fees, the organizations can help. Here are some of the valid claims that you can expect from working with a credit counseling agency:

1) A reduction or complete halt in bill collectors calling your house. The credit counseling agency has the power to stop, or at least partly eliminate bill collectors from phoning your home or work.

What causes this to happen on your behalf is the communication between the agency and your bill collector. For example, let’s say that you are getting harassed to pay your late bill and extra fees on a computer that was purchased with a store credit card. Your agreement was for $100 per month for 24 months. After paying your bill on time for just over a year, financial problems hit and you became several months late.

When you hire a credit counseling agency they will make contact with the computer store and arrange for a debt payment plan. The calls may stop right at this point or the computer store may need a few payments before they stop phoning you. Either way, they will eventually cease bothering you altogether.

2) A credit counseling agency will help improve the status of your credit. Any positive effort that you put into resolving your credit problems will have the effect of lifting up your score a bit. And so long as the agency you hire does in fact work on your behalf at contacting your debt entities and arranging a payment plan, you can expect your credit history and score to get better over time.

3) You will receive a personalized, step-by-step budget that will benefit you for years to come. The problem which promotes the majority, if not all, of the credit problems that people face is due to not being smart with their money in the first place. If you had created a budget from day one, and followed it to the “T”, then it is safe to say you would not be in the financial predicament that you are in today.

Your credit counseling agency will sit down with you and develop a written plan of action which will allot every penny of income you have coming in so that all of your needs are taken care of. A portion will go to paying off your debts. A portion will be set aside into a savings plan. A portion will be used for investments. And of course, there will be plenty of money left over for enjoyable activities.

Following this budget is a crucial element of successfully cleaning up your credit. If you don’t have the money you need to afford the necessities of life, pay back creditors, save for the future, and resist the temptations of money-wasting habits of the past, then nothing else that a credit counseling agency can do will help you in the long run. You really have to use what you learn.