Credit Report Inquiries Letter is a letter where the borrower provides description for the recent credit inquiries appearing on the credit report. Credit Report Inquiries Letter is a type of a letter of explanation. The lender requires this letter when it wants to know the reasons why there were recent credit report inquiries and if the borrower has taken any loan that is not yet reported on the credit report.
A number of recent inquiries on the credit report may be due to following reasons:
If there are a number of recent credit inquiries on the credit report, the underwriter should put a condition on the loan requiring a Credit Report Inquiries Letter. The loan originator needs to talk to the borrower and obtain the reasons for such inquiries. If the reason for the inquiries is because the borrower was shopping for a mortgage loan and has not obtained any additional loans then the loan originator may provide a pre-filled Credit Report Inquiries Letter which the borrower can sign and return back to the loan originator.
If the borrower has obtained additional loans then the loan originator should obtain the details of additional loans in the Credit Report Inquiries Letter. Additional documentation should also be requested such as loan agreement and recent account statement.
The letter is obtained before all the conditions for loan approval can be removed and the loan documents are drawn. In other words, obtaining Credit Report Inquiries Letter would be a prior-to-docs condition.
Updated: Sep 02, 2013