Do you feel self-conscious about how lenders might perceive you after examining your credit report? Perhaps you’re looking to obtain a loan, but your credit standing has taken a nosedive due to a job loss, divorce, medical issue, or other unforeseen adverse event.
Unfortunately, lenders have no clue about the financial distress you’ve faced. They only see a credit report filled with negative remarks, such as late payments and dangerously high debt levels. As such, they’ll assume you’re an irresponsible borrower and reject your loan application.
However, adding a consumer statement to your credit report can make you a more appealing candidate. A consumer statement is a brief note that allows you to clarify to lenders the circumstances that have led to a downgrade in your credit. While including this detail won’t enhance your credit score directly, it can improve your chance of qualifying for a loan.
In this guide, we’ll explain how a consumer statement works, when it’s worth adding one to your credit report, and how to do so.
What’s the purpose of a consumer statement on a credit report?
A consumer statement is a short, free-form statement that you can add to your credit report, describing your financial situation. It gives you the opportunity to explain why your credit score has dropped and address specific negative information in your credit history.
A consumer statement won’t affect your credit score or alter the details found in your credit report. However, it can give lenders a fuller picture of your financial history and more accurately reflects your ability to handle debt. Lenders can use this information to better assess your creditworthiness.
As a result, you have a greater chance to secure a loan you’d otherwise fail to qualify for. The consumer statement gives lenders peace of mind and boosts their confidence in you making timely payments.
You don’t have to pay a fee to add a consumer statement to your credit report, and the statement length varies depending on the credit reporting agency. Equifax offers room for up to 800 characters (or 110-220 words). TransUnion sets a limit of 100 words (up to 200 words in Saskatchewan).
When you should consider adding a consumer statement to your credit report
There are various scenarios where adding a consumer statement to your credit report makes sense. But you can classify them into two categories: general consumer statements and account-specific statements.
General consumer statements
This statement usually describes a significant adverse event that’s devasted your finances over which you had little to no control or could not anticipate. Some examples are job loss, divorce, natural disasters, and medical emergencies. It also applies to situations where you’ve been a victim of identity theft or a money-related scam.
Account specific statements
An account-specific statement is narrower in range than a general statement; it describes an issue you’ve encountered with an individual credit account.
For example, let’s say you spot what you believe to be an unauthorized charge on your credit card, which is now past due. You contact the credit bureau to dispute it, but they believe the charge is valid and refuse to remove it. If you disagree with their decision, a consumer statement can help you clarify the nature of that particular account to potential lenders.
Another example is a payment reported as late due to mailing delays or the creditor failing to update your account correctly after receiving the money. In this case, you acted responsibly by paying on time, which you can communicate to future lenders through a consumer statement.
How to add a consumer statement to your credit report
Below are the steps for adding a consumer statement to an Equifax and TransUnion credit report. Luckily, the process is straightforward.
Adding a consumer statement to an Equifax credit report
You need to submit a formal request to add a consumer statement to your Equifax credit report. Write your statement and mail it to Equifax at the following address:
Equifax Canada Co.
Consumer Relations Department
Box 190 Jean Talon Station
Montreal, Quebec
H1S 2Z2
You’ll need to include your name, address, date of birth, and phone number with your submission, plus photocopies of two valid pieces of identification.
Adding a consumer statement to a TransUnion credit report
To add a consumer statement to your TransUnion credit report, you must submit a request in writing to the following address:
For English speakers across Canada:
TransUnion Consumer Relations Department
3115 Harvester Road,
Suite 201 Burlington ON L7N 3N8
For French speakers in Quebec:
Centre de relations aux Consommateurs TransUnion
3115 Chemin Harvester,
Suite 201 Burlington ON L7N 3N8
You must include two pieces of valid identification with your submission; these need to display your name, address, date of birth, and signature.
How to write an effective consumer statement
Your consumer statement should explain the circumstances behind your financial hardship and indicate steps you’re taking to improve your situation. Show that you’re a responsible borrower grappling with a temporary financial setback rather than someone with poor money management habits.
Being concise is crucial since you have little room to explain your story. So avoid fluff and focus on the things that matter to get your point across to lenders.
Here’s an example of a consumer statement related to a layoff:
“On April 5, 2020, I was laid off from work. As a result, I fell behind on my line of credit and credit card payments from June to October of that year. I found a new job on November 20, 2022, and am doing my best to stay current with my accounts. Before my job loss, I’ve always paid my line of credit and credit card debts on time, as reflected on my credit report.”
Can you remove a consumer statement from your credit report?
At some point, your consumer statement may no longer be relevant or helpful. Suppose your financial situation has improved, and you’re confident you can obtain the financing you need. In that case, leaving it on your credit report can do more harm than good, as it signals to lenders that you’ve had money issues in the past.
You can remove a consumer statement from your credit report at any time. To do so, you’ll need to submit a written request to the credit bureau by mail like you would when first adding it. To speed up the process, contact Equifax and TransUnion by phone and ask if they can remove it immediately or inform you of the fastest way you can do so. There may also be options to remove your statement online if you have an account with one or both credit bureaus.
A consumer statement will remain on your Equifax credit report until you remove it. Conversely, a statement on a TransUnion credit remains for a maximum of six years or until you remove it earlier.
The bottom line on consumer statements on credit reports
A financial disaster can affect anyone at any time. A pristine credit report can get stained quickly following a slew of missed payments after a job loss or other adverse event. But that one event should never define your ability to handle debt, especially if you have a long history of solid money management and responsible borrowing habits.
That’s where a consumer statement comes in—it gives you the opportunity to provide context by sharing your story with lenders. By doing so, you can show that your financial mishap is only a blip in your credit history, nothing more.
Naturally, improving your credit standing will make you a more appealing candidate in the eyes of creditors, giving you access to a broader range of loan options. That’s why understanding what makes a credit score tick and how to rebuild your credit is crucial.
However, raising your credit score can take time. If you need financing now, a consumer statement can give you the extra boost you need to qualify for a loan. There’s no guarantee it’ll be enough to sway the lender into approving your loan application. Still, adding a consumer statement to your credit report costs won’t cost you anything, and it can be a great way to communicate to creditors that you’re worthy of a loan.
