Should I Add a Consumer Statement to My Credit Report?

woman sitting looking at tablet screen

Dear Experian,

I want to add a statement to explain my bad credit from about seven years ago. How do I do it?


Dear ALC,

If you've experienced financial distress that resulted in a negative payment history on one or more of your accounts, you can add a statement to your credit report to explain your circumstances. That "statement of explanation" can then be viewed by potential lenders when they review your credit report. These statements won't hide negative entries in your credit report or lessen their impact on your credit scores, but they can help open a discussion with your lender. This dialogue can be important in instances such as mortgage lending, where a manual review of your credit history is part of the lender's decision-making process.

Types of Consumer Statements on a Credit Report

There are two kinds of statements you can request be added to your credit report:

  • Account-specific statement: This statement is linked to a specific account in your credit history. For example, if you have a delinquency that was the result of extended unemployment, you can add a statement to the account explaining those circumstances. Account-specific statements are deleted from your report at the same time the account is deleted.
  • General statement: A general statement applies to multiple entries in your credit history or to your history in its entirety. This is the kind of statement you are describing. This type of statement may be applicable if, for example, you became delinquent on multiple accounts as a result of extended unemployment and wish to add a statement to your credit report explaining so. General statements remain on your credit report for two years.

Be Cautious About Adding Statements

If you choose to add a general statement of explanation to your Experian credit report, you should contact Experian to remove that statement once the accounts in question are no longer on your credit report. In your case this is important since you stated the negative entries are about seven years old, which means they should be coming off the credit report soon.

Once the negative information is removed, the statement may unnecessarily notify lenders that you had a payment issue in the past.

You don't want to hear your lender say, "I don't see any late payments in your credit report, but the statement you added says you had some problems; can you tell me more about that?"

Although account-specific statements do not remain on the report after the account is removed, you should use caution when adding these as well.

Account-specific statements can take one of two forms. The first, which you are describing, is sometimes rather harshly referred to as a "statement of excuse." A classic example is, "My payments were late because I went on vacation and forgot to mail my payment." Such statements are very unlikely to improve a lender's outlook when you apply for a loan.

However, if you missed payments as a result of an extenuating circumstance, such as a natural or declared disaster, extended unemployment or a medical emergency, adding a statement could be a wise move. Be aware that consumer statements included on your report at your request, even ones that contain medical information, are disclosed to others.

The second type of account statement, a "statement of dispute," is a way to present your side of the story if you disagree with the reported status of an account. For instance, if you've disputed a late payment the lender says is correct, you can add a statement to tell potential new lenders that you disagree with the status of the account and why.

Statements of dispute may be helpful because they alert lenders to your disagreement and can give you an opportunity to provide documentation or other proof of your claim so that your application can move forward. However, keep in mind that some lenders may ask you to remove any statements of dispute before they'll approve you for new credit.

Adding a Statement if You're a Victim of Fraud or Identity Theft

If you are a victim of fraud or identity theft, contact Experian to add an initial security alert to your credit report. The alert will remain on your credit report for 12 months and notifies potential lenders that you may be a victim of fraud. It also encourages creditors to take extra steps to verify your identity before approving any applications in your name.

A seven-year extended fraud victim statement can be added if you confirm you are a victim of identity theft and provide a copy of a police fraud report or other valid identity theft report. The victim statement explains that you've been defrauded and asks lenders to call you before granting credit in your name.

If you see any potentially fraudulent items in your report, notify Experian as quickly as possible. Contact any lenders involved so they may begin a fraud investigation as well. It's also a good idea to contact your local police department to file an identity theft report.

Communication With Lenders Is Key

If you are experiencing financial distress as a result of circumstances beyond your control, contact your lenders to explain your situation before you miss any payments. In some cases, you may be eligible for assistance from your lender or others that can help you protect your accounts and limit any long-term damage to your credit history.

Thanks for asking.
Jennifer White, Consumer Education Specialist