Free Letter of Explanation for Credit Problems [Sample]

Your Name
Your Address
City, State, Zip Code

DATE

Name of Lender
Address of Lender
City, State, Zip Code

RE: Explanation for late payments on credit report

Dear Name of Lender:

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This letter is in reference to my application for a loan of $10,000 to purchase a new car. I understand that my credit rating is low and the purpose of this letter to explain the reason for this, and how I have remedied my financial situation.

On DATE, the company I worked for laid off 200 employees including myself. During the exit interview, I was told it was because the company needed to reduce spending due to the economic downturn.

I was in good standing with the company and was given a letter of recommendation from my supervisor. Because of the economic situation, I was unable to get another job until DATE.

During the time I was out of work, my family lived on my wife’s salary. We were unable to make payments on our credit cards and mortgage. Since I got my new job, we have resumed payments on all of our debts and plan to pay them off. 

Now, I require a car for my new job and would like an auto loan. I will be able to make the payments every month. Thank you for considering my situation. If you have any questions, I can be reached at Phone Number or Email Address.

Sincerely,

Signature
Your Name
List of Enclosures: Copies of letter of leaving the job, recommendation from supervisor and hiring letter for a new job