diff --git a/dvc/path/data_item.py b/dvc/path/data_item.py
index 8b0f0e41c..9eafeff70 100644
--- a/dvc/path/data_item.py
+++ b/dvc/path/data_item.py
@@ -20,9 +20,9 @@ class DataDirError(DvcException):
         super(DataDirError, self).__init__(msg)
 
 
-class DataItemInStatusDirError(DataDirError):
+class DataItemInConfigDirError(DataDirError):
     def __init__(self, file):
-        msg = 'File "{}" is in state directory'.format(file)
+        msg = 'File "{}" is in config directory'.format(file)
         super(DataItemInStatusDirError, self).__init__(msg)
 
 
@@ -48,10 +48,8 @@ class DataItem(object):
         if not self._data.abs.startswith(self._git.git_dir_abs):
             raise NotInGitDirError(data_file, self._git.git_dir_abs)
 
-        if self._data.abs.startswith(self.state_dir_abs):
-            raise DataItemInStatusDirError(data_file)
-
-        pass
+        if self._data.abs.startswith(os.path.join(self._git.git_dir_abs, self._config.CONFIG_DIR)):
+            raise DataItemInConfigDirError(data_file)
 
     def copy(self, cache_file=None):
         if not cache_file:
diff --git a/dvc/repository_change.py b/dvc/repository_change.py
index 087a118d8..1a487fede 100644
--- a/dvc/repository_change.py
+++ b/dvc/repository_change.py
@@ -4,7 +4,7 @@ from dvc.exceptions import DvcException
 from dvc.git_wrapper import GitWrapper
 from dvc.executor import Executor
 from dvc.logger import Logger
-from dvc.path.data_item import DataDirError, DataItemInStatusDirError
+from dvc.path.data_item import DataDirError, DataItemInConfigDirError
 from dvc.path.stated_data_item import StatedDataItem
 from dvc.utils import cached_property
 from dvc.config import ConfigI
@@ -74,7 +74,7 @@ class RepositoryChange(object):
             Logger.debug('[Repository change] Add status: {} {}'.format(
                          item.status,
                          item.data.dvc))
-        except DataItemInStatusDirError:
+        except DataItemInConfigDirError:
             self._created_status_files.append(file)
         except DataDirError:
             self._externally_created_files.append(file)