A letter explaining credit problems should contain a summary of the problem and a list of steps taken to ensure the problem does not happen again. A lender requires this type of letter when someone is applying for credit and has one or more late payments on his credit report.Continue Reading
It is possible to attach a letter of explanation to a credit report, but only if the explanation is less than 100 words. Lenders are not likely to be swayed by a lengthy story, so give a short summary of the reason for each missed payment. Some valid reasons include job loss and unexpected medical bills.
This type of letter should also explain what steps have been taken to correct the problem and ensure that all payments are made on time in the future. Someone who lost her job and had to tap into her savings might say that she puts extra money in her savings account each month to ensure she has money to pay her bills in the event of a layoff.
The writer's full name and address should be at the top of the letter. When mailing a letter of explanation to any of the credit bureaus, the writer should also include his/her date of birth, current address, Social Security number, previous addresses and credit report numbers.Learn more about Credit & Lending