I have to write a letter of explanation for derogatory credit report info. What should I write?
I am refinancing my home loan and getting some equity out. There are a few things on my credit report that don't look good. What kinds of explanations are best? I don't even really know why they were 30 days late. But they were and I have to deal with it now. I have not had anything bad in the past year but they still want a letter of explanation. I don't know what kinds of excuses are better than others.
- 1 decade agoBest Answer
Make it "out of your control" reasons.. If the lates and/or problems are all around the same time.... you could say you mailed the payments in a timely manner and have no explanation as to why they didn't reach the creditor in time to be posted to your account - or why the creditor did not post them on time. You could have had a family emergency that required you to suddenly leave home, without preparation, - immediately upon taking care of the situation you contacted the creditor and paid the amount due for that month.
Your loan officer should be helping you with this............ if not work with someone else......... Your loan officer will be making big bucks off your refi........ make he/she work for it.
- 1 decade ago
Be honest. Do not make things up. So, if prior to this you didn't worry too much about paying things on time, but this experience is making you realize the importance of being on time, your letter might go as follows:
I did not realize how important getting my payments in by the due date really is. I felt that if I paid it, that was all that mattered. Now I see that it is really important to get my bills paid on time or early. I am using this opportunity to increase my credit score with this fresh start.
Hope this helps. This is from years of mortgage experience, by the way. :)