Have you ever had something happen that made you look bad, and you would have liked to explain yourself, but were never given the chance?  This happens on credit reports all the time.  You might have a great credit rating with no bad notations on your report for years, and then you lose your job.  A few months later, you are behind on your credit card, mortgage, and car payments, and your credit rating takes a hit.  After you find a new job and start making payments again, the blemishes on your credit report are still there, and they can stay there for seven years!

There is a provision of the Fair Credit Reporting Act that allows you to add a 100-word statement to your credit report.  You can use this statement to explain that a bad notation is a mistake, dispute the information on your credit report, or simply to explain that you just went through a tough financial period but things are better now and you are making your payments on time.  Keep in mind that this explanation will not increase your credit score, but it may give lenders more confidence in your ability and intent to repay debts in a timely fashion.  Make sure that the statement is provided to each of the big three credit agencies which are Experian, Transunion, and Equifax.  Each agency has their own procedure for adding consumer statements to credit reports, so be sure to contact the agency to find out their requirements.