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Credit Letters

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There are various types of Credit Letters which can be classified into three categories - those written to a consumer, written by a customer to a credit reporting agency and those written by a consumer to a credit institution. Often, people tend to confuse credit letters with letters of credit. A letter of credit is a credit letter, but a credit letter is not always a letter of credit, if you can make out the difference between the two. Following are certain situations when you may need to draft a credit letter -

  • If you are a consumer and you need to request an update on your credit report from a credit reporting agency or
  • To report an error in your credit report or
  • To report missing information that needs to be added in your credit report or
  • To reply to or acknowledge a creditor's letter that is demanding repayment
  • If you are a financial institution and you need to request authorization from a consumer prior to forwarding his/her credit report to any financial institution or
  • To deny or accept a credit based on the consumer's credit history or
  • To make the customer aware of the consequences for delays or stalls in repayment

These letters are basically regarded as legal documents and often used as documental evidence and this makes it difficult for one to write a credit letter.

Suggestions for credit institutions

Financial institutions should take extra care while drafting one since they need to be authoritative yet courteous. It is very important for a financial institution to sound assertive even while denying a credit to a consumer for they might still bring in business for the institution in future. When discontinuing one's credit or starting the process of collection, a credit institution must sound assertive and keep their gates open for future credit requests from that customer.

When a payment is overdue maybe by over a month, allow the customer to discuss his/her concerns on the repayment of debt either in person or over the phone. If the customer has failed to make a payment for more than 60 days, you may need to inform him/her regarding the penalty that she might have to bear. But remember, you need to be able to do that in a professional manner to avoid sounding like a threat. Explain the customer why you need to take this step and give options or suggestions to your customers in order to resolve the situation. And finally, be sure to follow through on this.

Suggestions for consumers

While writing to a credit company, you need to sound sincere and provide assurance on repayment of your debt as they are looking for one. So write your letter explaining your situation briefly and mention the steps you plan to take in order to settle your debt. State how much you can afford to pay as a monthly installment in case you are requesting a credit from the institution or you are about to start the repayment of your debt.

In the case of a credit application, let the credit company know that you hope to have your request processed and in turn, provide an agreement on a suitable payment plan. Also allow the credit company to follow up on the case for further details or discussion.

If you are writing to a credit reporting agency regarding an error or lack of information in your credit report and if you need certain information to be added in your credit report, provide accurate facts and figures and documental evidence for support.

In this website, you will also find sample credit letters based on different scenarios to guide you in writing an effective credit letter. Make sure you have a glance at them for they will definitely give you a clear picture on how to write a credit letter.

Below we have provided sample credit letters for your review:

Acceptance Letters
Apology Letters
Appeal Letters
Application Letter
Appointment Letters
Appreciation Letters
Asking Letters
Business Letters
Change of Address Letter
Charity Letters
Christmas Letters
Collection Letter
Complaint Letters
Confirmation Letters
Condolence Letters
Congratulations Letters
Cover Letters
Credit Letters
Donation Letters
Employment Letters
Farewell Letters
Formal Letters
Fundraising Letters
Goodbye Letters
Hardship Letter
Holiday Letters
Inquiry Letters
Introduction Letters
Invitation Letters
Job Letters
Leave Letters
Marketing Letters
Meeting Letters
Memo Letters
Offer Letters
Promotion Letters
Proposal Letters
Recommendation Letters
Reference Letters
Request Letter
Resignation Letter
Sales Letters
Santa Claus Letters
Scholarship Letters
Sponsorship Letters
Tax Letters
Termination Letters
Thank You Letter

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