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04-02-2009 at 9:52 AM
ashleywait...
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Joined on 02-22-2007
Grand Prairie, Texas
834 Points
ashleywaits is not online. Last active: 07-27-2009, 8:40 PMNewbie

Letter of Explanation for Derogatory Credit

When DH was in college he let a couple of credit cards go without paying them for a little while, he had fallen on hard times and was trying to finish up school which cut into his work schedule greatly.  So, the underwriter is requesting a letter explaining his derogatory credit.  This was over 5 years ago and he hasn't had a late payment since then.  I was just wondering if anyone else has had to do this, and if so, how do you word the letter?  Thanks in advance!

04-02-2009 at 10:00 AM
domesticbl...
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Joined on 02-02-2009
Iowa
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domesticbliss26 is not online. Last active: 07-31-2010, 4:26 PMBronze
No real advice, but I'd ask the ladies on money matters, and maybe even google and see if there is some type of form letter you can adapt.
04-02-2009 at 10:10 AM
french526
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Joined on 06-19-2007
Virginia
75,456 Points
french526 is not online. Last active: 09-03-2009, 4:28 PMSilver

If I'm understanding you correctly, he's since paid off the cards, right?  If so, I would just write a letter stating just what you said - that he was in school, that he had to cut back hours at work and was unable to make the payments but as soon as he was able to work full time again, he made sure those accounts were cleared.  Also state that he has a fulltime job and has worked to make sure his accounts remained in good standing since. 

I didn't have to do this but I think that just telling it like it was is your best option.  Especially since his recent credit history is good.

04-02-2009 at 10:14 AM
TheBachelo...
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Joined on 04-02-2005
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TheBachelorette is not online. Last active: 07-28-2010, 11:38 AMNewbie
I am an attorney and have prepared a couple for clients. There is no right or wrong way to do this.  Just be thorough.  Lay everything out.  Explain that he was in college and felt "overwhelmed" by the many responsibilities being thrown at him at such a young age.  Then explain that as your DH matured he was able to handle all his responsibilities, including his financial ones.  Give them examples of his good fiscal activities over the past 5 years (paid off debts, make regular and timely payments, etc).  Then do a paragraph or so on your own fiscal history and your responsibility.  Conclude with your responsibilities as a married couple, stable employment, and willingness to make your mortgage your number one fiscal priority
 
04-02-2009 at 10:23 AM
Foodielici...
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Joined on 03-25-2009
US of A
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Foodielicious is not online. Last active: 07-31-2010, 12:07 PMSilver

go to creditboards.com.

If those accounts are current or closed, you may even have success asking them to remove that mark from the record entirely.  No guarantees but it's worth a shot.

Opinions are split on whether or not this is ethical, but I think if the company is willing without too much cajoling, it can be fine.

 
04-02-2009 at 1:41 PM
arobertson...
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Joined on 02-15-2008
Durham, NC
49,542 Points
arobertson62282 is not online. Last active: 07-27-2010, 11:59 AMSilver

I had to do this - when my credit was run about 3 years ago...one of my credit cards came up with all these late payments. Turns out, that it was on a 0 balance or something.

Explain the situation in as much detail as possible and how you've recovered since...responsibility, etc. 


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04-02-2009 at 4:44 PM
soon to be...
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Joined on 04-07-2008
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soon to be Mrs. Connolly is not online. Last active: 07-31-2010, 9:40 AMNewbie

Is the dept paid off?  You could write:  During college I fell into financical hardship and fell behind paying ______________.  Since then I have paid them off fully. 

YOu may also want to show proof of paying if that is not stated on credit report. 

 

 
04-03-2009 at 8:13 AM
amynicolet...
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Joined on 09-13-2007
Oxford, MI
69,754 Points
amynicoletta is not online. Last active: 07-31-2010, 5:59 PMSilver

Yes, DH and I both had to. We had a couple each and had to explain every one and the situation. I followed a sample letter I found while googling 'credit explanation letter' and other terms like that.

We got pre approved and are now waiting to close on our new house!! GL! 

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