How to write a credit explanation letter
What is a credit report?
The purpose of the letter when applying for a mortgage is to show the lender that while the potential borrower has experienced credit problems in the past, he has tried to remedy those problems as quickly as possible, according to Trulia. Enclosing documentation, such as divorce decrees, court orders for child support, letters from employers or doctors, or records from the state unemployment office, helps to substantiate the claims.
What should you do if you have bad credit?
Consumers with bad credit should order copies of credit reports, study them, and ask credit reporting companies to correct inaccurate information, advises the Federal Trade Commission. To improve their credit, consumers should pay bills on time, keep card balances low, leave unused accounts open and negotiate with creditors, reports Entrepreneur.
What's the difference between a credit report and a credit score?
A credit report is the detailed history of a consumer's borrowing history, and a credit score is a value assigned to the consumer based on credit history details, according to U.S. News & World Report. In a FICO scoring model, payment history and debt amounts are primary scoring factors.
What is a good sample credit report?
A good sample credit report includes personal information, past and present credit status, information acquired from the federal district bankruptcy records, a current credit score and the names of individuals or organizations who have requested a copy of a person's credit report. According to the Federal Trade Commission, consumers are eligible to receive free copies of their credit reports each year to check for discrepancies and get an idea of their current credit status. These reports can be ordered through the official annualcreditreport.com site.
How do you dispute information on your credit report?Source: www.ask.com