Business Letters

Credit Letters

A credit letter is a response to customer's application for credit. The objective is to inform the customer of the status of that application. It also serves as a legal document notifying the recipient of the results of a credit check.

This is an extremely sensitive subject. Keep in mind that your response is a judgment regarding the applicant's personal credibility. Your reader deserves a direct and forthright decision and will appreciate a tactful and courteous tone.

The scope of a credit letter should include only those details that reflect the outcome of the credit checking process. The information presented will vary depending on the decision being made.

Whether your letter grants or denies credit, this is an opportunity to build goodwill. Keep in mind that a person with less than a desirable credit rating may still be a good cash customer and may in time become a better credit risk.

Identify Your Reader

A credit letter should be addressed to a person who wishes to open a charge account. That person's name will be found at the beginning of a previously submitted credit application and should be placed in the inside heading and the salutation of your credit letter. It should also be included on the top line of your envelope.

Remember that people do business with people first, businesses second. When you address your reader by name, you recognize their individual importance and value as a human being.

Establish Your Objective

The objective of a credit letter is to inform the reader of an approval or denial of a request for credit. Notification of an approval is always easy. Be warm and welcoming in your tone and style. Refusing an application is a more delicate matter. You should avoid being apologetic, however; remember, credibility is the applicant's personal responsibility, not yours.

To help your reader comprehend your decision, be brief and to the point. If you are not extending credit, use your first paragraphs to explain the factors or criteria used to judge the application and explain which of those factors did not meet an acceptable standard.

Determine Your Scope

The scope of your credit letter will be determined by the decision to extend or deny the application. Use a welcoming tone when granting credit and take the time to explain the limits, terms and conditions. Your reader will need to know a few things:

Enclosing a company brochure is a common method for explaining these details.

Organize Your Letter

Organizing your credit letter will establish a logical order in which to present your information. You have already begun this task by establishing an objective and determining your scope. Refer back to them. Together they include much of the content that will become the body of your letter.

A simple outline will get you organized. Begin by creating a list of points that your letter will address and put them in the sequential order that will best help your reader comprehend your credit decision. These points will become the backbone of your draft; your outline will become a checklist.

Draft Your Letter

Working from an outline is the simplest way to draft a credit letter. You have already organized yourself by creating a list. Refer back to it and turn each fragment into a full and complete sentence expressing a single thought or idea.

In order that your thoughts and ideas are conveyed in a cohesive manner, write in as natural a sounding voice as possible. Try writing your draft quickly and then read it out loud. Concentrate on communicating your objective to your reader. Make sure that the scope of your letter contains all the relevant information included in your organizational list.

Keep in mind that you are writing a rough draft. For the moment you can ignore spelling, grammar, punctuation, sentence and paragraph structure. Those are technical details that you will pay attention to in the final step when you review and revise your work.

Close Your Letter

A credit letter should close in a professional manner. Once your last paragraph is written, sign off between a complimentary close such as "Sincerely," or "Thank you," and your printed name.

If you a re writing in conjunction with an official duty, place your title below your printed name. Additional information such as dictation remarks, notification of attachments, enclosures and copies sent to other individuals should be placed beneath your title line.

Review and Revise Your Credit Letter

Reviewing and revising the draft of your credit letter is a final inspection, a last check to see whether your objective is clearly stated and your scope concisely defined. Put yourself in the reader's shoes and ask whether the details are accurate and complete.

Look for obvious errors. Check for spelling, sentence structure and grammar mistakes. Your complaint should be direct and to the point, so make sure that you have used a strong active voice.

Keep in mind the overall cohesiveness of your letter. Look for accuracy, clarity and a sense of completeness. Ask yourself if the transitions between paragraphs are working and if your point of view, tone and style are consistent throughout the text.

Examine your word choices carefully. Ambiguous words lead to confusion. Jargon and abstract terms may not be understood at all and affectations, cliches and trite language serve no real purpose and will obscure your objective.

If you have not written an opening or a closing now is the time. The introduction should lead into the letter with a firm statement about the application's status. The conclusion should reiterate your objective and, when appropriate, contain an attractive inducement to a future business transaction.

If you have not written an opening or a closing now is the time. The introduction should lead into the letter with a firm statement about the application's status. The conclusion should reiterate the objective and, when appropriate, contain an attractive inducement to a continuing business relationship.

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