A Letter of Explanation for Derogatory Credit Template is a template for a letter that is used to explain derogatory credit. The letter’s purpose is to explain why the credit was reported and to ask for leniency in approving a loan or credit application.
The template can be used by individuals or businesses and customized to fit the applicant’s specific needs. In most cases, the template will include a section for each negative item on the credit report, followed by an explanation of why the item was reported.
In this post, we’ll explain everything you need to know about derogatory credit markers – including what they are, how they can affect your score, and what you can do to remove them. Stay tuned!
Sample Letter of Explanation for Derogatory Credit
[Your Name]
[Your Address]
[City, State, Zip Code]
[Name of Lender]
[Address of Lender]
[City, State, Zip Code]
RE: Explanation for derogatory credit
Dear Name of Lender:
I am writing to explain the reason for my low credit rating and how I have healed my economic situation. On [Date], the organization I worked for laid off 200 workers, including myself. During the exit interview, I was told the company should reduce spending due to the financial downturn. I was in a good place with the company and was given a letter of guidance from my supervisor.
I have been actively seeking employment since then and have been able to secure a part-time job. I am also selling some personal belongings and keep cut back on spending to make ends meet. I have made all of my credit card and loan payments on time since being laid off, and I am sure that I will be able to resume doing so. This explanation will demonstrate my commitment to meeting my financial obligations despite difficult circumstances.
Thank you for your time and consideration.
Sincerely,
[Signature]
[Your Name]
List of Enclosures: [Copies of letter of leaving the job, recommendation from supervisor, and hiring letter for a new job]