Mortgage LOX Maker: Derogatory Credit Letter
Make your own Letter of Explanation (LOX) for derogatory credit items. Explain late payments, collections, and credit issues for mortgage applications. Generate instant PDFs for your lender with digital signature capture.
Your Information
Letter Preview
I, {{borrowerName}}, confirm that the {{issueType}} with {{creditorName}} dated {{issueDate}} was the result of {{creditIssueExplanation}}.
{{resolution}}
This was an isolated incident, and I have had no further derogatory credit since that time.
{{borrowerName}}
{{borrowerEmail}}
{{borrowerPhone}}
Borrower's Signature: {{signature:borrowerSignature}}
Date: {{signatureDate}}
Tips for Success
- Keep explanations brief and factual
- Attach supporting documentation when possible
- Review all information before signing
- Submit within 48 hours of your loan officer's request
Important Reminders
- All information must be truthful and accurate
- False statements may result in loan denial
- Keep copies for your records
- Contact your loan officer with questions
When To Use A Credit Issues Letter
Late Payments on Credit Accounts
You missed payments on credit cards, auto loans, or other accounts due to temporary financial difficulties. Focus on what caused the issue and how you've maintained good payment history since then.
Accounts Sent to Collections
Some of your accounts went to collections because of missed payments or billing disputes. Explain whether these have been resolved and paid off.
Charged-Off Accounts
A creditor wrote off your debt as a loss, but the account still appears on your credit report. Show how you've addressed this and improved your financial situation.
Medical Debt Collections
Medical bills went to collections due to insurance disputes, coverage gaps, or unexpected medical costs. Medical debt is often viewed more favorably by lenders.
Credit Damage from Identity Theft
Fraudulent accounts or unauthorized activities damaged your credit score. Include police reports and documentation showing you were a victim of fraud.
Common Scenarios Requiring Multiple Letters
Bankruptcy + Credit Recovery:
- Use this derogatory credit letter to explain current credit issues
- Use our foreclosure/short sale letter if property loss occurred
Medical Debt + Employment Gap:
- Use this derogatory credit letter to explain medical-related credit issues
- Use our employment gap letter if medical issues caused work absence
- Use our large deposit letter if insurance settlements were deposited
Divorce + Financial Settlement:
- Use this derogatory credit letter to explain divorce-related credit issues
- Use our pending litigation letter if legal issues are ongoing
How to Use This Credit Issues Letter Generator
Gather Your Information
Collect all necessary details and supporting documentation before starting the generator.
Complete the Form
Fill out all required fields in the generator. The preview will update in real-time as you type.
Review and Sign
Review your letter for accuracy, add your digital signature, and download the PDF.
Submit to Your Lender
Send the completed letter to your loan officer along with any supporting documentation.
Supporting Documents Your Lender May Need
| Document | What It Tells Your Lender |
|---|---|
| Payment receipts showing resolution | Proves you've addressed and resolved the credit issue |
| Settlement agreements | Documents the terms of how the debt was resolved |
| Medical bills or insurance claims | Shows credit issues were due to medical circumstances |
| Police report (if identity theft) | Proves you were a victim of fraud, not irresponsible |
| Credit monitoring alerts | Shows you're actively monitoring and protecting your credit |
Frequently Asked Questions
How old can credit issues be and still need explanation?
Most lenders want explanation for derogatory items within the past 2-4 years, depending on the severity and loan type.
Will this letter guarantee my loan approval?
No, but it helps underwriters understand your situation and may improve your chances if the issues are resolved.
Do I need this letter for every credit issue?
Only for significant issues that show on your credit report. Minor late payments may not require explanation.
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