Letter of Explanation & Credit Agreement - Recommended Sample

If you've had some credit issues in the past that may affect your chances of getting approved for a loan, then a letter of explanation may be just what you need. A letter of explanation is a document that provides the lender with a written account of any financial challenges or discrepancies in your credit history. At BizzLibrary.com, we understand how important it is to clear up any potential doubts and communicate your financial status effectively. That's why we recommend our professionally drafted letter of explanation template to help you craft a compelling case.

Why Do You Need a Letter Of Explanation?

If you have negative marks on your credit report, such as late payments, collections, bankruptcy, or other issues, it can be almost impossible to secure financing. However, with a letter of explanation, you can provide your lender with a valid reason for these events and prove that you're taking steps to improve your creditworthiness. Here are some reasons why you may need a letter of explanation:

• Credit Issues: If your credit report shows any delinquencies, disputes, collections, or any other inconsistencies, you may need a letter of explanation to clarify and justify those issues.
• Employment Gaps: If you have gaps in your employment history that may raise concerns, a letter of explanation can help explain those gaps.
• Other Explanations: You may also need a letter of explanation to provide other explanations, such as changes in your income or address, unusual expenses, or any other relevant financial information.

Recommended Steps To Write a Letter Of Explanation

Writing a letter of explanation may seem daunting, but it's actually a straightforward process. Here are some recommended steps to help you craft a compelling letter of explanation:

1. Be Honest: Always be honest and transparent about your financial situation. Explain the reasons behind the issues and provide supporting documentation if possible.
2. Be Concise: Keep your letter brief and to the point. Don't get into unnecessary details that may distract from your main message.
3. Provide Solutions: Explain what steps you're taking to address the credit issues and how you're working towards improving your credit score and financial situation.
4. Proofread: Make sure to proofread your letter for any grammar or spelling errors. You want to make a good impression and show your lender that you're serious about your financial responsibilities.

Download Our Letter Of Explanation Template

If you need a letter of explanation, don't waste your time and energy trying to figure out how to draft one from scratch. BizzLibrary.com offers a professionally drafted letter of explanation template that you can use as a starting point to craft your own document. It's available in DOCX format, which means you can easily customize it to fit your specific needs and circumstances.

Download our letter of explanation template today and start taking control of your financial future.