Letter to Explain Late Payments When Applying For Credit

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Over the past few months, you have been working hard to repair your credit because you want to buy a home. Your efforts have helped, but a few uncomfortable negative marks remain. After working with a bank or mortgage company, they’ve decided to approve your application but at a higher rate than you hoped for. After expressing concern over the rate increase, the lender may ask you to explain any late payments on your report.

This letter will not help a desperate credit situation but may make a difference in a marginal one. Explaining a couple of late payments could mean the difference between a good interest rate and a fair one.

The basic premise of this explanation letter is to address:

  • The situation you were in which caused you to pay late was beyond your control.
  • The situation has changed and your financial footing is solid again.
  • The steps you are taking to make sure any future challenge will not impact your ability to pay.

Of course, you do not want to just copy this letter. You will need to change the wording of this letter to fit your specific situation.


Your Full Name
City, State, ZIP

Account Number: XXXXXXXXXX

Creditor Name
City, State, ZIP

To Whom It May Concern:

I am writing this letter to explain my late payments on my (mortgage/credit card) to (mortgage/credit card company) in (insert month/year).

I am very distressed that this has ever happened to me, but I was <laid off>, <seriously injured>, <going through a death in family> . The circumstances drained my savings and I was forced to miss a payment because of it.

I have always prided myself in paying on time, and I have taken steps to put away more money in my savings account to guard against other unforeseen occurrences like this. My financial footing is solid again, and all payments after that time have been made on time.

Your Name

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