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If your credit reports are in relatively good shape but you’ve got one missed or late payment that you believe is hurting your credit scores, writing a goodwill letter to that creditor could erase the blemish.
When you send a creditor a goodwill letter, you’re asking it to contact the credit bureaus to remove a legitimate negative mark from your credit reports (one for which you’re at fault). While the creditor doesn’t have to consider your request, it may show mercy and ask the bureaus to remove the ding, which could improve your credit scores.
- What is a goodwill letter?
- When to consider using a goodwill letter
- How to write a goodwill letter
- What about a pay for delete letter?
What is a goodwill letter?
When you write a goodwill letter, you’re asking a creditor or collection agency to remove a negative mark on your credit reports. Why bother? Dings on your reports, such as a late payment or an account in collections, stay on your reports for seven years and weigh down your credit scores. This may make it more difficult to get approved for any future lines of credit or financial accounts.
If your misstep happened because of unfortunate circumstances like a personal emergency or a technical error, try writing a goodwill letter to ask the creditor to consider removing it. The creditor or collection agency may ask the credit bureaus to remove the negative mark. If the bureaus agree to do so, it could save you years of credit difficulties.
Take note: A goodwill letter is different from a dispute. When you dispute something on your credit reports, you’re contacting the three major consumer credit bureaus and claiming that something on your reports is wrong.
With a goodwill letter, you’re not contacting the credit bureaus, and you’re not disputing an error. You’re reaching out directly to the original creditor or collection agency to ask for forgiveness for a mistake you made and request that it makes a “goodwill adjustment.” In other words, you’re asking the creditor to remove something negative but legitimate as an act of kindness or understanding.
Keep in mind that goodwill letters aren’t an official tactic. They’re not actively publicized as a viable option by the credit bureaus, the Consumer Financial Protection Bureau or the Federal Trade Commission. In fact, the FTC states that in the case of accurate negative marks, only time will make them go away. Numerous anecdotes in online forums indicate that goodwill letters sometimes work — but since it’s not an official or legal complaint process like a dispute, creditors aren’t required to consider your request or respond to you.
“It never hurts to ask, but in most instances, a goodwill letter won’t result in removal of the negative information,” says Rod Griffin, director of consumer education and engagement at credit bureau Experian. “Lenders have a legal and contractual obligation to accurately report the history of the account, including any late payments.”
This means some lenders may reply by telling you that they’re legally obligated to keep the negative mark on your reports.
When to consider using a goodwill letter
In Griffin’s opinion, if you have a history of missed payments or other risk factors, such as high credit card balances, the lender is less likely to grant your goodwill wish. Your request will also be less effective if you don’t have a good excuse for the misstep, like if you simply forgot to make your payment.
But Griffin says there are instances in which a lender might agree to remove a late payment.
‟For example, if the consumer has never had any delinquency in the past, catches up immediately on the missed payment, and asks that it be removed from the credit report, the lender might oblige. Life happens, and they and Experian understand that.”
If you have a good track record of on-time payments and an overall strong credit history, here are some situations when it makes sense to try a goodwill letter.
- You missed a payment because of a financial hardship, like the loss of a job or a divorce.
- You missed a payment because of an emergency, like a medical crisis that put you or a loved one in the hospital.
- Your payment didn’t go through because of a technical glitch, like autopay not working correctly.
- You moved and didn’t receive the bill at your new address.
How to write a goodwill letter
You can send a goodwill letter via snail mail or email to the customer support department at your creditor or collection agency. You can find example letters, including some real ones that were successful, on the myFICO message boards.
Most advice out there suggests personalizing your letter, being sincere and polite, and showing gratitude for your business relationship. Conventional wisdom suggests you should also …
- List your account number and address.
- Briefly explain the situation that caused the error.
- Explain the steps you took to correct the issue and ensure it wouldn’t happen again.
- Mention how it’s negatively affecting you, like if it’s hindering your ability to qualify for a mortgage.
- Ask for a “goodwill adjustment” to have it removed.
If you have any supporting evidence, such as hospital bills that show you had a medical emergency, you can include copies along with your letter to bolster your case.
Another option you can try is to call the business’s customer support department and ask for a goodwill adjustment by phone.
What about a pay for delete letter?
Sometimes you can request that a debt collector or collection company remove negative items like medical collections or unpaid debts from your credit report in return for you settling the debt (known as a pay for delete letter). But, as with a goodwill letter, there’s no guarantee that paying delinquent accounts with a debt collection agency through a pay for delete offer will remove negative account information from your credit reports.
There’s no guarantee that a goodwill letter will work, and there’s no officially approved formula to follow in order to give yourself the best chance of success. Keep in mind that because creditors aren’t required to consider your request, you may get no response at all. And it’s also possible that the credit bureaus — after a request from a creditor — will update your credit reports without sending you any confirmation, so check your reports regularly to see if anything happened. If a month passes and you haven’t gotten a response or noticed a change on your credit reports, be persistent and call or send a follow-up letter.