Can a goodwill letter get late payments removed from your credit report?
Key takeaways
- A goodwill letter is a formal request to a creditor asking them to remove a negative mark, like a late payment, from your credit report.
- Goodwill letters are most effective when the late payment was an isolated incident caused by unforeseen circumstances, such as a financial hardship or medical emergency.
- Lenders do not have to respond to a goodwill letter, and many large lenders and credit card issuers have policies against doing so.
A late payment isn’t the end of the world. But if your payment is more than 30 days late and hits your credit report, the impact on your credit score can be devastating. You may have luck getting it removed, though, if the oversight was a one-time occurrence or if you were dealing with a situation that was beyond your control.
Consider writing a goodwill letter to the creditor to plead your case. There are no guarantees you’ll have success, but it’s worth trying.
What is a goodwill letter?
A goodwill letter is a formal letter sent to a creditor, lender or collection agency to request forgiveness for a late payment or other negative item on your credit report.
After reviewing your request, the lender may decide to make the requested changes to your account as a gesture of goodwill. However, if you’re going to send a goodwill letter, keep your expectations low because a letter often won’t make a difference.
Lenders are not obligated to honor your request or even respond to your letter. In fact, many larger lenders and credit card issuers state that they do not accept goodwill letters, as they are legally and contractually obligated to provide accurate reporting of account activity, including late payments. Still, some people report success trying this method.
A goodwill letter is not a credit dispute. A dispute asks a credit bureau to verify the accuracy of something on your credit report, while a goodwill letter asks creditors for leniency on a derogatory mark that is accurate.
When should you write a goodwill letter?
Consider writing a goodwill letter when you’ve had a late payment or other negative item reported on your credit report due to isolated circumstances beyond your control. Suitable situations might include a temporary financial hardship, medical emergency or personal crisis.
If you’re going to try asking for forgiveness, make sure the late payment or issue was a one-time occurrence and not part of a recurring pattern. Lenders are far more likely to show leniency if they see your missed payment as an isolated mistake rather than a sign of ongoing financial instability.
Ultimately, they want reassurance that this issue won’t happen again, so only proceed with a goodwill letter if you’ve addressed the root cause of the problem and are committed to maintaining good financial habits going forward.
How do you write an effective goodwill letter?
A goodwill letter should be written formally, showing your lender that you take your late payment seriously. Here are some tips to help increase the chances of a successful outcome:
- Be mindful of your tone. Address the creditor or lender respectfully and thank them for their time.
- Be transparent. Clearly explain the situation that led to the late payment with relevant details and/or documentation to support your explanation.
- Accept fault: Acknowledge any errors and express genuine remorse for any inconvenience caused.
- Offer reassurance. Mention that it was a one-time occurrence and explain any steps you’ve taken to prevent future issues.
- Be straightforward. Clearly state your request, whether it’s removing the negative item from your credit report, a late fee waiver or another form of leniency.
- Provide supporting documents. If applicable, list any additional documents included with the goodwill letter, such as proof of payment or hardship letters.
- Express gratitude. Thank them for their time and express hope for a positive resolution.
- Review your letter. Read the letter to confirm it’s clear, concise, professional and persuasive.
[Your Name]
[Your Address]
[Phone Number]
[Email Address]
[Date]
[Creditor/Lender’s Name]
[Creditor/Lender’s Address]
Dear [Creditor/Lender’s Name],
I am writing to address a recent late payment on my account with [Creditor/Lender’s Name].
[Explain the circumstances that led to the late payment or negative item on your credit report. Be honest and provide relevant details. Note any documentation you can enclose.]
I take full responsibility for the late payment. [Acknowledge any mistakes made and express genuine remorse for any inconvenience caused.]
Despite this incident, I have maintained a positive payment history with [Creditor/Lender’s Name]. [Highlight any previous instances of on-time payments or your long-standing relationship with the creditor.]
I assure you that this late payment was an isolated incident. [Reassure the creditor that the late payment was not typical of your financial behavior and explain any steps taken to prevent future issues.]
I kindly request [specific action, such as the removal of the negative item from your credit report, a waiver of late fees or another form of leniency].
Thank you for taking the time to consider my request. I appreciate your understanding and cooperation in this matter.
Sincerely,
[Your signature]
How do you send a goodwill letter?
There are three ways to request a goodwill adjustment to your credit report. Although lenders aren’t obligated to respond to goodwill requests, choosing the right communication channel can increase your chances of reaching the right person and getting a timely response.
By phone
Before dropping a letter in the mail, consider starting with a phone call to your lender’s customer service department. Speaking to a representative can give you a clearer idea of their policies on goodwill adjustments and whether they are open to removing late payments from your credit report.
Customer service may direct you to use a specific process, such as filling out an online form or emailing your request.
By email
Some creditors prefer digital communication, so it’s worth checking their website or customer service policies to see if they accept goodwill requests via email.
An email has the advantage of speed and allows you to track your message. However, a formal, well-constructed letter sent through postal mail can often carry more weight.
By postal mail
When sending a paper letter, consider using certified mail. This allows you to confirm delivery and record when the letter was received, which can be helpful if there’s no immediate response.
Although it costs a bit more, certified mail ensures your request isn’t lost in the shuffle.
What should you do if your goodwill letter is declined?
Throughout this process, it’s important to manage your expectations. A goodwill letter is a request for leniency, not a guaranteed solution. If the creditor doesn’t respond or denies your request, consider debt management alternatives, such as:
- Credit counseling if you need help managing your debt
- Dispute with the bureaus if you have inaccurate information on your credit reports
- Credit repair services if you need help disputing information and have the budget to pay for services
Depending on your circumstances, these options may help you get your credit back on track, despite the late payment.
What do you do if you never made a late payment?
If you notice a late payment on your credit report and believe you have made all your payments on time, you’ll want to take a different action. In this case, you can contact the creditor to address the inaccuracy or dispute the misreported payment directly with the three credit bureaus: TransUnion, Experian and Equifax.
Next steps
It’s always best to avoid late payments, but one slip-up doesn’t have to permanently damage your credit score. A well-crafted goodwill letter can sometimes convince creditors to remove the negative mark from your credit report. When writing your letter, be sure to highlight that it was an isolated incident, show genuine remorse and include any relevant documents to back up your case.
Remember that creditors aren’t obligated to honor your request, and you may not receive a response. If the letter doesn’t work in your favor, other options, like debt management, credit counseling or credit repair services may help you improve your score over time.
