Do 100-word statements matter?

This post originally appeared June 9, 2016 on as “Who sees credit report 100-word statements.”

By Barry Paperno

Dear Speaking of Credit,
Barry, if I write a 100-word statement on my credit report, does every lender see it? Or just the ones I want to have see it? In other words, if despite my medical issues I managed to keep my mortgage current but had some credit card late pays, I want card issuers to see why I had a problem, but I don’t want future mortgage lenders to see that I ever had a problem at all. And do the 100-word statements expire, or do I need to manually remove them? Thanks. – TJ

Dear TJ,
The “100-word statement” first came about as a way for credit bureaus – Equifax, Experian and TransUnion – to comply with a Fair Credit Reporting Act (FCRA) requirement that some recourse be available to consumers following an unsuccessful dispute over the accuracy of credit report information. It says:

If the reinvestigation does not resolve the dispute, the consumer may file a brief statement setting forth the nature of the dispute. The consumer reporting agency may limit such statements to not more than one hundred words if it provides the consumer with assistance in writing a clear summary of the dispute.

There are two types of consumer-initiated statements that provide this vehicle for consumers to tell their side of the story to lenders:

Account-specific statement – a very brief (few words) explanation statement from the consumer’s perspective that is linked to a specific previously-disputed entry on the credit report.

General statement – most likely the statement you’re considering, an explanation using up-to-100 words that provides some background into the financial circumstances resulting in negative entries on the credit report.

Addressing your questions as to 1) which lenders “see” the 100-word statement, 2) whether you can choose which lenders receive it, and 3) when these statements expire:

  • Every lender that checks your credit report or score after the statement has been placed in your credit file gets access to the statement. Whether these lenders truly “see it” may be another story, as they are most likely to ignore this information entirely when reviewing a credit report.
  • You don’t get to restrict which lenders have access to your 100-word statement once it’s been added to your credit report. However, you can instruct the credit bureau to deliver the statement to any additional lenders of your choosing that have accessed your credit report at that bureau during the past six months.
  • While an account-specific statement is deleted along with the credit reporting item to which it is linked, expect a general (100-word) statement to linger on your credit report for anywhere from two to 10 years, depending on the credit bureau. You can also instruct the bureau to remove it sooner.

It’s hard to argue with taking advantage of your right to tell your side of the story to all who view your credit report. Yet, the reality is that today’s lenders simply don’t see enough value in these statements to consider them in their credit decisions, nor are their contents considered by credit scores.

As if these statements being mostly disregarded by lenders isn’t evidence enough of their ineffectiveness, your point about wanting to avoid attracting the attention of future mortgage lenders to your past financial difficulty provides another reason to think twice before adding a 100-word statement.

Mortgage lending is among the least-automated types of credit, compared to credit cards and auto loans. Therefore, with a mortgage loan application, there is more of a risk that a 100-word statement will raise a red flag with a live mortgage underwriter. And given that a mortgage application can include enough pitfalls and complexity without adding more, you’ll want to stay away from consumer statements – and remove any existing ones – if you expect to buy a home in the near future.

Going back to your concern about when consumer statements expire, since a 100-word statement can remain for up to 10years on a credit report, it stands a good chance of eventually outliving the information being referenced by the statement. In that situation, if read by a “live” lender, your statement could unintentionally shine a spotlight on some past problems that are no longer reflected anywhere else on the report.

If despite a 100-word statement not being likely to sway a lender in your favor you decide to add a 100-word statement anyway, plan to check your credit reports at least a couple of times per year, as you’ll only want the statement to remain on your report for as long as the information it’s referencing. This monitoring of your credit report becomes increasingly important the closer you get to the negative item’s automatic removal date – typically after seven years. Or you may want to remove the statement a year or two prior to the deletion of the medical debt if you find that it is no longer hurting your credit score to where an explanation might be necessary.

To add or remove a consumer statement, simply write to the credit bureau reporting the negative information or use the credit bureau’s online disputing process. Tips on how to compose the most effective explanation are also available on the credit bureau websites and by phone with bureau representatives.

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