A credit explanation letter should be clear about each incident, include the date and amount, give a concise explanation and what is being done to prevent it from happening in the future. A credit explanation letter is often requested by entities, such as a potential employer or mortgage lender, who might be interested in a person's credit history.Continue Reading
If there are a few negative marks on a person's credit report, a lender might ask for a letter explaining the delinquencies. The letter should be concise and to the point, detailing the circumstances in question.
Be sure to date the letter and address it to the person that requested it. Write a short introductory paragraph explaining the purpose of the letter.
State the explanation for each issue as factually as possible. For example, if a mortgage payment was late due to an unforeseen medical emergency, describe the emergency and submit supporting documentation such as the hospital bill.
In addition to knowing the details about a credit infraction, lenders also want to know how this will be prevented in the future. Using the example from step two, it might be that a payment plan was worked out with the hospital so other obligations could be met.