How to Explain Late Payments on Credit Reports

It happens to many people. You're late on paying a bill for whatever reason. What a lot of people don't realize is how those late payments can have a negative impact on your credit report. Many people go through financial hardships that cause them to be late on loan and credit card payments. Although most of these hardships are temporary, negative entries can stay on your credit report for up to seven years, or 10 years for bankruptcy. Negative items on your credit report can prevent you from getting approved for credit, so you must be able to explain your situation and convince a potential creditor to take a chance on you regardless of your past financial history.

Instructions

1

Briefly explain the circumstances that caused late payments to appear on your credit report. Avoid including irrelevant information, and never try to ask for sympathy.

2

Give the details of any personal challenges you've been through. Explain the circumstances that caused your financial problems. Explain briefly what events led to your inability to take care of your financial obligations.

3

If the problems were caused by your own carelessness and negligence, be honest and admit your mistakes. Accept responsibility for having contributed to your negative credit. Explain what lessons you learned from those mistakes and what you are doing to make sure those mistakes don't occur again.

4

Give a brief explanation of what actions you took at the time to rectify the situation. Even if your efforts did not prevent the negative credit entries, potential lenders or creditors like to see evidence that you tried to correct the problem before it got out of control.

5

Mention that you are aware of the importance of maintaining a good credit record and emphasize that you now pay your bills on time and you plan to bring your finances back on the right track.