A letter to improve your credit won’t always help you restore a pristine credit rating, but writing and mailing your own explanation of a late payment can go a long way toward boosting your credit score by eliminating negative items on your credit report.
You can be sure that late payments are the worst thing you can do to negatively affect your credit history. Making a credit card payment 30 days late is the fastest way to lower your all-important FICO credit score.
FICO, which stands for Fair Isaac Co., refers to the company that developed the credit scoring model most lenders and credit card companies use today when deciding if and how much credit in your name .
What constitutes a good credit score?
The FICO scoring system ranks the following items in your credit history based on these percentages, according to MyFICO.com:
1. Your previous payment history: 35%
2. Amounts you owe on credit cards, loans, etc. — 30%
3. Length of your credit history — 15%
4. New credit that you have applied for, used — 10%
5. Types of credit used — 10%
As you can see from the list above, a full two-thirds of your FICO credit score will be based on (1) the on-time payments you’ve made in the past, plus (2) the total amount of debt you’ve carried on credit cards, monthly consumer loans, department store credit cards and the like.
You can control payments on time. So it’s clear that if you want to fix your bad credit, your best bet is to learn how to keep your payment history accurate, as well as push yourself to find new ways to keep your debt levels down.
The good news: bad credit doesn’t have to last forever! By taking proactive steps today, you can repair your credit report and score in the future. This article will focus on the first way to dispute bad credit by writing letters to explain late payments on your credit accounts.
How to start writing credit repair letters:
Here are some simple steps to follow when writing your own late payment explanation letter:
- Be open and honest when writing a letter to dispute a late payment.
- If you know you were late, say so and ask for forgiveness. Remind them that you were a good customer in the past and that you intend to be a better customer in the future.
- If you question the accuracy of the late payment, please include a copy of your online payment statement. Just be sure to copy these payments to your computer if you need to prove an online payment in the future or else you won’t have any proof to get a satisfactory response to your request.
- Send your letter as soon as possible after the payment is late. If you procrastinate and wait until the creditor contacts you, you will lose a lot of bargaining power in your argument. By proactively admitting your mistake and asking for forgiveness, you have a better chance of avoiding negative items showing up on your credit report.
Free Late Payment Letter Sample
We’ve added a link to a great late payment explanation letter sample provided by Buzzle.com, showing you how to start writing your own.
Organizing your own unique words and thoughts to write your personalized explanation of a late payment can help cure your bad credit score by removing negative items from your credit report with the stroke of a pen for just the price of a postage stamp. . The cost is minimal; the results can be substantial. Make the effort now to write a late payment explanation letter to correct your credit report today.