When Telling Your Side of the Story Hurts Your Credit Report and Credit Score
If you are trying to clean up your credit, one thing that you can do is dispute negative items on your credit report.
This involves writing a letter or filling out a form and sending it to the credit bureaus. The credit bureaus then have 30 days to either verify or erase the bad mark.
One of the things they will encourage you to do is to write a 100 word statement that can appear alongside the black mark.
Don't do this!
It may appear to you that this is your opportunity to explain the reasons why you didn't pay. You might think it would put you in a sympathetic light when someone reviews your file.
The first response I have to this is that most of the time, no one reads your credit report. They simply look at your FICO number.
But when they do read your statement, they don't see a one-time hard luck story, they see that you're confirming that you didn't pay.
Don't be tempted to tell your side of the story. Have you ever known a child who keeps talking until he's gotten himself into trouble? That's what you'd be doing.
Generally, in the words of a cop drama, "these words can and will be used against you."
Essentially, what you are doing is "proving" the case against you.
For instance, when you say that you didn't pay because you "lost your job," what the credit bureau sees is that you didn't pay. They don't care what your reasons for not paying are. Their job is only to show whether you are a good credit risk based on past performance.
Your excuses simply become their ammunition.
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Source: http://ezinearticles.com/
Added: August 20, 2008
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