letter of explanation for collections on credit report

letter of explanation for collections on credit report

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Many potential employers check credit reports today, so if your credit is dinged, adding a 100-word letter of explanation to your credit report can set the record straight The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars.

Use this sample letter explaining late payments as a template for your formal letter of explanation. Last updated on January 15th, 2019 One of the most important aspects of a person’s financial status is his credit report.

If you spot an error on yours, writing a credit dispute letter may help resolve the issue.. There are no penalties for disputing errors on your credit reports.. In the letter, you can explain why you believe the items are inaccurate and. collections; late payments; Bankruptcies that haven't been removed after.

Creating a letter of explanation is simply a matter of writing out the reasons you’ve had so many checks on your credit report and letting the bank know that you’re a reliable borrower. Letters of explanation can be sent to a lender or directly to the credit agencies to be given out with your credit report.

Writing a credit report dispute letter to the bureaus (Equifax, Experian, and Transunion) is an extremely effective technique for clearing past due items, charge-offs, and collections from your credit report-and consequently raise your FICO score. The Fair Credit Reporting Act (FCRA) gives consumers the right to verify their credit report.

If you have derogatory marks or gaps on your credit report, you may be asked to submit a letter of explanation to your loan underwriter that describes, clearly and concisely, the circumstances that led to those negative entries. Letters of explanation aren’t just arbitrary mandates intended to make your mortgage application longer and more confusing.

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Simpler the better. When writing your letter of explanation, the magic formula is to just write a simple explanation, Halladay adds. For instance, tell the underwriter that a snow plow hit your mailbox, and you didn’t get the bill that showed up delinquent on your credit report. That’s all you have to explain.

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