How to Write a Letter When Denied Credit

Credit denials are frustrating for a potential borrower who has spent time completing an application, and is counting on that loan to do something that they really want to do. Many borrowers view denials like this as an insult. A credit denial is nothing personal; it means that you did not meet the criteria that the lender established to approve the loan. If you believe that the lender made an error, write a letter explaining this.

Instructions

1

Find out to whom you should address your letter. You want to address the letter to a specific person, whenever possible, if you want to have the credit denial reversed. People like to be named, and are more receptive to a personal letter than a generic letter addressed to "loan officer." Call the bank and ask who makes the loan decisions, and the name of their supervisor.

2

Include information that the lender needs in order to reconsider your loan. If the lender did not have, or overlooked information that you feel is pertinent to the decision, state your case as to why that information is important. If the lender did not consider additional income in qualifying you for the loan, state why that income should be included. Explain to the bank that the income is stable, and will help you repay the loan.

3

Write about credit problems of the past if they are part of the denial. Be specific about the circumstances leading up to the slow payments or charge-offs. If these concerns are due to a health concern or job loss, make sure that the lender is aware of these problems, and detail the steps that you have taken to prevent this situation from happening again. Be sure to provide reasons for the problems, and not make excuses or blame other generic situations or people, such as a prior supervisor.

4

Inspire confidence in the lender. You are selling yourself to the lender, so use good sales techniques. State what the features and benefits are for making a loan to you. Obviously, the bank's biggest concern is earning money, and ensuring they are repaid, so include how you plan to accomplish these goals.

5

Structure your letter correctly. It should have a distinct introduction, as well as a body and conclusion. Make the letter easy to read. Write in an informal style, with shorter sentences to make your writing easier to understand. Keep the paragraphs short, while providing critical information. Edit carefully, watching for misspellings and sentence errors. Write in active voice whenever possible. Ask for action from the lender at the conclusion of the letter, and tell it when you will be making contact for a follow up.