How do you write a credit explanation letter?

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.

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.

1. Start with the current date and a greeting

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.

2. Use facts to explain the credit issues

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.

3. Address steps taken to remedy the situation/li>

   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.