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Member
MamaCat
Posts: 9
Registered: ‎02-16-2012
0

Credit Inquiry letter of explanation

My husband and I are in the process of getting a mortgage for our first home.

To the best of my knowledge, we are currently "conditionally approved."

However... we are running into a bureaucratic nightmare. We have now written 7 letters for the purpose of "explaining recent credit inquiries." Apparently, the wording we have used is unacceptable, but I can't get a straight answer out of anyone for how to fix it. I called the lender and was told that it is illegal for me to have any contact with them without our mortgage broker on the phone. I asked the mortgage broker how we need to word the letter and he says it is illegal for him to tell me.

 

Essentially, we shopped around to compare interest rates and fees. We did not accept money as a result of any of the inquiries so far. The latest inquiries are all from the mortgage broker we selected.

Can anyone tell me how to word a letter that explains that in a way that will be acceptable to the lender?

03/15/2012 EQ: 784 (myFICO Score Watch alert)
03/01/2012 EQ:720 TU:797 EX:788 (lender pull)
02/29/2012 TU: 814 (myFICO quarterly report)
02/28/2012 EQ:720 (myFICO Score Watch alert)
02/27/2012 EQ:720 TU:746 EX:788 (lender pull)
02/15/2012 EQ:694 TU:746 (lender pull)
02/14/2012 EQ:694 (myFICO)
Senior Contributor
Walt_K
Posts: 3,065
Registered: ‎11-02-2009
0

Re: Credit Inquiry letter of explanation

Here is what I used:

 

I am writing to explain the following inquiries listed on my credit report:

 

[List of inquiries listing party requesting report and date of inquiry]

 

Each of these inquiries was for the purpose of shopping for a competitive rate for a mortgage application.  No new personal debt was incurred, or credit granted from these inquiries, which is not already listed on my credit report.

 

--

You can probably get by with just the last sentence.


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


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Established Contributor
chan85
Posts: 554
Registered: ‎03-13-2011
0

Re: Credit Inquiry letter of explanation

is a letter of explanation typical? i had some in december because i had to get a new car (totaled mine) and then there is one on some report (tu i think?) for opening a bill me later account with paypal..... wonder if the bill me later would put towards my DTI since it does have a balance?

WM TransUnion- 650 (6/2014) Credit Sesame Experian- 691 (6/2014) Credit Karma TransUnion- 665 (6/2014)
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GOALS: No new inqs until 10/30/14. Pay off debt consolidation loan in less than 1 year. Snowball debt payments.
Last HP: 3/5/14
Senior Contributor
Walt_K
Posts: 3,065
Registered: ‎11-02-2009
0

Re: Credit Inquiry letter of explanation

It is typical, but I don't know how far back they go.  I had to explain my mortgage inquiries, but I had an inquiry from late summer last year that they didn't ask me about. 


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


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Moderator Emeritus
webhopper
Posts: 7,230
Registered: ‎09-16-2011
0

Re: Credit Inquiry letter of explanation

Mine is like a table... my broker provided it to me....  The exact wording is:

 

The reason for my recent inquiries is as follows:

 

Date                     Company                        Reason

9/21/11                CSC                                I was shopping for mortgage pre-approval. I did not open an account and cancelled all applications.

 

 

And it had a place for borrower to sign.


Starting Score: 08/29/2011 TU 671 EQ 674
Current Score: TU 754 EQ 694 EX 697
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Valued Member
Annaliese
Posts: 48
Registered: ‎02-10-2012
0

Re: Credit Inquiry letter of explanation

[ Edited ]

Your LO/lender should provide you that form. We had to do the same thing as well. It's like a waiver or an explanation - we filled the blanks and just wrote  the 'shopping for mortgage rates'.  Then we signed the paper. :smileyhappy:


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