A credit improvement letter won’t always help you restore a pristine credit rating, but writing and mailing your own explanation for a late payment can go a long way toward raising your credit score by eliminating negative items on your credit report.
You can rest assured 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 Isacc Co., refers to the company that developed the credit scoring model used by most lenders and credit card companies today when deciding whether and how much to extend credit to you. .
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 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 work on finding new ways to keep your debt levels low.
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 negative 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 drafting 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 apologize. Remind them that you are 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 successful response to your request.
- Send your letter as soon as possible after payment is late. If you procrastinate and wait until the creditor contacts you, you will lose a lot of negotiating room in your argument. By proactively admitting your mistake and apologizing, you have a better chance of avoiding negative items from appearing on your credit report.
Late Payment Letter Free Sample
We’ve added a link to a great sample late payment explanation letter provided by Buzzle.com that shows you how to start writing your own.
Organizing your own unique words and thoughts to write your personalized explanation for a late payment can help cure your bad credit score by removing negative items from your credit report with the stroke of a pen and 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.