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Kathy Godin's Blog

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Explain Why You Were Late on FICO Credit Report

The politicians helped you out.  The Fair Credit Reporting Act (FCRA) allows you to explain why you were late on FICO credit report.  Or maybe they didn't.

Margret was upset.  She had been sick.  Bills piled up.  She was late paying her credit card bill.  It didn't go unpaid.  It was just late.  It wasn't her fault she moaned.  She requested a copy of her credit report.  Sure enough there it was – late.

She wrote to the credit card company, told them about her illness and pointed out that she had never been late before.  Margret requested they remove the late payment from her FICO credit report.  They refused.  What could she do?

Leda pointed out that the Fair Credit Reporting Act (FCRA) was written to help her.  Margret had the right to add a 100-word explanation to her credit report.  This would keep her from being harmed by the reported late payment.

Grumpy Bella butted in.  Nobody asked her to, she just did.  Bella was like that.  She told Margret and Leda that companies couldn't erase a late payment unless they had made an error.  If it was actually late, it had to stay on the FICO credit report.  No choice.

FICO scores apply mathematical formulas to facts.  They are not designed to evaluate and rate excuses or reasons for late payments.  Sending in an explanation won't change your FICO score.  Lenders don't care why.  FCRA provides right to post explanations on your credit report to appease you.  It doesn't change anything.

Margret wanted to know if there were any exceptions.  Grumpy Bella indicated that she heard from a mortgage originator friend of hers that explanations can help at times.  In those cases, lenders wanted a written explanation in letter signed by loan applicant for their files.  They didn't go by explanation on FICO credit report.

Kathy Godin, Award-Winning Loan Officer and Branch Manager

Prime Mortgage Lending, Inc.

(919) 789-9933

Where people, not computer robots, answer the phone.

Serving All of North Carolina

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