Letter of explanation to underwriter for derogatory items on credit report
Our underwriter is asking for a letter of explanation for derogatory items on our credit report for the last 5 years. Some of them can be explanied easily but others were just due to poor money management from 4-5 years ago. How do I explain that?
Re: Letter of explanation to underwriter for derogatory items on credit report
I recently had to do this and below is what I provided, which was accepted. I didn't go into too much detail.
Account One (Mercury Card)
I cannot attribute my lates to anything other than fault that is of my own. Immaturity, poor budgeting practices and lack of urgency is why these lates occurred. I had the funds to pay but did not make it a priority to pay on time.
Since the time of my last late payment, I have implemented a budgeting plan that has aided me extremely well. It has resulted in four years of not a single payment missed, often paying more than the required balance or full statement payment. The balance on this account is $0, which is reflected on the most recent statement dated for September 5, 2020, as well as MYFICO credit report dated for October 18th, 2020.
Account Two (Capital One)
I cannot attribute my lates to anything other than fault that is of my own. Immaturity, poor budgeting practices and lack of urgency is why these lates occurred. I had the funds to pay but did not make it a priority to pay on time.
Since the time of my last late payment, I have implemented a budgeting plan that has aided me extremely well. It has resulted in three years of not a single payment missed, often paying more than the required balance or full statement payment. The balance on this account is $0, which is reflected on the most recent statement dated for October 20, 2020, as well as MYFICO credit report dated for OCtober 18th, 2020.
Account Three (Capital One Auto Finance)
I cannot attribute my lates to anything other than fault that is of my own. Immaturity, poor budgeting practices and lack of urgency is why these lates occurred. I had the funds to pay but did not make it a priority to pay on time.
Since the time of my last late payment, I have implemented a budgeting plan that has aided me extremely well. It has resulted in not a single payment missed. Additionally, on June 13, 2018, I refinanced my car loan to Navy Federal Credit Union, which gave me a lower rate. I have not missed a single payment, which is reflected on the most recent statement dated for September 24, 2020, as well as MYFICO credit report dated for October 18th, 2020.
Account Four (Discover Card)
I cannot attribute my lates to anything other than fault that is of my own. Immaturity, poor budgeting practices and lack of urgency is why these lates occurred. I had the funds to pay but did not make it a priority to pay on time.
Since the time of my last late payment, I have implemented a budgeting plan that has aided me extremely well. It has resulted in three years of not a single payment missed, often paying more than the required balance or full statement payment. The balance on this account is $0, which is reflected on the most recent statement dated for October 19, 2020, as well as MYFICO credit report dated for OCtober 18th, 2020.
