If the letter to explain bad credit is for use in securing a home mortgage, Trulia recommends ordering a copy of the credit report and detailing the reason behind each negative remark listed on the report. However, if the letter is to ask a bank to consider a short sale of a property, the purpose is completely different, according to About.com.
The purpose of the letter when applying for a mortgage is to show the lender that while the potential borrower has experienced credit problems in the past, he has tried to remedy those problems as quickly as possible, according to Trulia. Enclosing documentation, such as divorce decrees, court orders for child support, letters from employers or doctors, or records from the state unemployment office, helps to substantiate the claims.
When writing a letter to explain bad credit when asking a bank to approve a short sale of a home, the purpose is to explain the cause for the problem and that the situation is not likely to improve, according to About.com. This type of letter should show no hope for things getting better. If the lender reads the letter and sees disposable income or a chance for recovery, it is likely to refuse the offer.Learn More
A judgment remains on a credit report for seven years from the date of filing. A judgment is considered a public record and can adversely affect a credit score. Some public records, such as divorces, do not affect a FICO, or credit score.Full Answer >
To dispute information on your credit report, gather information supporting your dispute, type a dispute letter, send the letter to the appropriate credit bureau, allow the credit bureau to investigate your dispute and follow up to make sure the information was corrected. The entire process takes a few weeks.Full Answer >
Financial Scams notes that an eviction can stay on a credit report for up to seven years. Typically the landlord does not send the information to the credit bureaus. When a landlord evicts a tenant through court action, the eviction appears on a credit report as a public record.Full Answer >
"HSBC/RS" on a credit report refers to the retail service section of the HSBC Bank. The Hong Kong and Shanghai Banking Corporation is a company that handles issuing and servicing private credit accounts and car loans for nearly 60 retail companies around the world.Full Answer >