Writing an Explanation Letter to the Credit Bureau Does Absolutely No Good

A consumer has the right to include an explanation letter in a credit report. For instance, if there’s a late payment on a credit account and you find out about it when you review your credit report, you need to find out if the late payment was, in fact, late.

You find the old statement from the creditor, find the copy of the cancelled check or online , make copies, and send them to the credit bureau. If the negative information is a mistake, the information should be removed completely from the report.


But if it’s not a mistake, you have the right to prepare a letter that must be included with your credit file. Let’s say that, yes, you were late, but there were extenuating circum- stances. You make the payment on time, but for some reason the payment never arrived at the creditor’s payment center.

Soon, you received a late payment warning in the mail from the creditor, so you called the and said, ‘‘I mailed that payment two weeks ago,’’ or whatever. The creditor then said, ‘‘Yes, received it; don’t worry.’’

But the check still didn’t clear. At least, it didn’t clear for a couple of months, but finally it did. So you called the creditor, and the person on the phone told you that the creditor had received it, but it was never reflected that way. When you review your credit report and see the error, you try to correct it by calling the creditor.

The creditor replies, ‘‘We don’t show any record of its being made on time; in fact, we show that it was two months late.’’ You’re astonished. You say, ‘‘But when I called you, you said that you had the payment and not to worry! Now it’s showing up late on my credit report!’’
‘‘I’m sorry,’’ replies the creditor. ‘‘I don’t know who you talked to back then . . .’’
‘‘Fred!’’ you say.
‘‘I’m sorry, but Fred doesn’t work here anymore. There’s nothing I can do,’’ the creditor finally says.
You’re heartbroken. But wait! You have the right to include a letter with your credit file explaining your side of the story, don’t you? Of course you do. So you compose a great letter, with as many facts as you can remember, and send it to the credit bureau.

Guess what? Nobody cares. Several years ago, lenders read credit explanation letters when they were included in the file: ‘‘I bought this piece of junk from them and it never worked, so I didn’t pay them!’’ or ‘‘I was out of the country for three months,’’ or ‘‘I moved and they never sent the bill to my new address.’’

Whatever the case, letters were read by underwriters who were deciding whether or not to approve a particular mortgage. But not now. With the advent of credit scoring, credit explanation letters have gone the way of the dinosaur. If a friend or acquaintance or real estate agent suggests writing a letter to the bureau explaining your side of the story, you’re wasting your time with regard to a mortgage.