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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 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. 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 having sympathy for you and remove it.
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 are reaching out directly to the original creditor or collection agency and asking for forgiveness for a mistake you made, and requesting they make a “goodwill adjustment.” In other words, you’re asking them 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 are legally obligated to keep the negative mark on your reports.
When to consider using a goodwill letter
In Griffins opinion, if you have a history of missed payments or other risk factors, such as high credit card balances, the lender is more unlikely 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.
However, according to Griffin, “there are instances in which a lender might agree to remove a late payment.”
‟For example,” the Experian rep says, “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 due to a financial hardship, like the loss of a job or a divorce
- You missed a payment due to an emergency, like a medical crisis that put you or a loved one in the hospital
- Your payment didn’t go through due to 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 is negatively impacting you, like if it’s hindering your ability to qualify for a mortgage
- Ask them 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.
To repeat: There’s no guarantee this will work, and there’s no officially approved formula to follow in order to give yourself the best chance of success. Also remember 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 them 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.