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Foolish Excuses People Give for Having a Bad Credit Score

ABC News reports about crazy excuses people give for explaining a bad credit score—not to teach consumers to use the same excuses but to let them know that they may no longer work today. So don’t try explaining to your lender using excuses such as these:

1) A borrower who had been way behind his loan payments said, “My wife and I were abducted by aliens and implanted with a device.”

2) A man trying to explain to his mortgage lender why he has a bad credit score said perhaps something like this, along with other reasons, in a 10-page letter, “I discovered I was married to a devil. I should’ve known that as my marriage license number is 666.” He also mentioned he had gout and hurt his back.

3) A woman trying to get credit said in a letter, “It wasn’t my pot pipe that started the fire. It was my boyfriend’s.”

Karen Deis, founder of an online training company for loan officers, said that many of the excuses were actually true but consumers weren’t just able to explain themselves well, which hinder them to get credit.

The law allows lenders to base their loan decisions on the borrower’s creditworthiness, job and income stability, and the amount of down payment willing to be doled out. But lenders need explanation for instances like fire, child support, divorce and foreclosures as these can affect their decision.

Debt advisers always give this piece of advice to every consumer who has incurred bad credit: Be honest about your situation. Deis told ABC News that consumers should have everything they claim documented and consider talking to a loan officer.

A loan officer can help you identify which credit issues matter to lenders and which do not. It’s important to identify so you won’t have to give explanation for everything. It’s the job of the loan officer to help you explain. He or she can also write the explanatory letter, something he or she could do better than you.

As a bonus, the story concluded with some real examples of statements you shouldn’t tell a potential lender when trying to explain a bad credit score:

“We decided to pay off our credit card debt and stopped making our house payment for a year.”

“I stopped making credit card payments and filed bankruptcy because I didn’t want any debt when I buy a house…I should get approved, right?”

“I pay late fees every month, so that should get me a better credit rating.”

“My car broke. I stopped making payments. Wanted them to come and get their junk car.”

“The construction workers moved my mailbox and could not find it for three months.”

“I thought she was payin’ it—she thought I was payin’ it.”

“The bill was always due at a bad time of the month.”

“I make all my payments on time…to the collection agencies.”

Borrower explaining late payment of Mobil Credit Card: “I got bad gas.”

“The stamp fell off my payment envelope.”

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