What is a goodwill letter to creditors

Q: How do you write a good goodwill letter?

I truly believe that it doesnt reflect my creditworthiness and commitment to repaying my debts. It would help me immensely if you could give me a second chance and make a goodwill adjustment to remove the late [payment/payments] on [date/dates]. Thank you for your consideration, and I hope youll approve my request.

Wondering if there is a way to remove negative marks from your credit report? A goodwill letter might be able to help. TDECU shows you how.

Table of Contents Show

What is a goodwill letter?
How to Write One
What to Expect
This goodwill letter asks a creditor to remove a late payment.
What is the purpose of goodwill letter?
What is a goodwill letter example?
How do you write a good goodwill letter?

Have you checked your credit report and realized one late or missed payment is having a major impact on your score? Writing a goodwill letter to a creditor could possibly erase that blemish on an otherwise spotless credit score.

What is a goodwill letter?

So, you might be asking yourself, what is a goodwill letter? A goodwill letter is not an official tactic and is not widely publicized. Essentially, it is a letter that is a written correspondence to creditors to request they remove negative marks on your credit report. Reaching out personally to a collection agency or creditor might seem like a long shot, but dings on your credit report for missed or late payments can negatively impact you for years. Accounts in collections and late payments stay on credit reports for seven years, and during that time you may find it more difficult to get approved for new loans or lines of credit.

Goodwill letters should be written by borrowers who have an otherwise good credit score and a good track record when it comes to making payments. If creditors find you have a history of repeatedly missing payments or other negative marks, they probably are not going to be lenient and help you. If your credit history shows you are typically in good standing, goodwill letters can help address missed payments that happened during emergencies or due to technical issues. Unforeseen events and emergencies happen whether we want them to or not, and often those circumstances lead to financial hardships. If a personal emergency impeded your ability to make on-time payments, a creditor or collection agency may choose to ask credit bureaus to remove the negative item. While this is never a guarantee, a little bit of time and effort may be worth thousands in the long run.

It is important to note that writing a goodwill letter is different from disputing an error. In a goodwill letter, you are writing directly to the original creditor or collection agency and asking for forgiveness. You are not directly reaching out to any of the three credit bureaus - Equifax, Experian, or TransUnion – and it is not to be used for disputing errors. This is exclusively for trying to expunge a blemish on an otherwise clean credit history.

How to Write One

If it sounds like a goodwill letter might be able to help you, you are probably wondering how to write one. Goodwill letters are professional, business-related correspondences. They should be clear and concise and should explain the reasons for the lapsed payment and what you have done to prevent this from happening again. You should generally include:

Your identifying information such as your account number and address
The creditor’s name and address
The date of the missed or late payments
A brief explanation of why you missed the payment taking full responsibility
A list of steps you have taken to improve your creditworthiness such as enabling autopay
The reason you are requesting the goodwill adjustment
A direct request to have the negative mark removed

When writing your goodwill letter keep in mind your goal should be to prove the missed or late payment was a temporary lapse and that you are committed to continuing a strong credit record in the future.

You can find an example of a sample goodwill letter template here: TDECU Goodwill Letter Template

What to Expect

Goodwill letters are a great, little-known option for getting negative marks removed from credit reports. However, as a disclaimer, there is no guarantee it will work. Lenders are not obliged to remove negative marks. You may end up not hearing back at all, or you might be outright rejected. A creditor might also make the adjustment and not even tell you, so be sure to check your reports regularly. If it has been over a month since sending the letter, do not be afraid to be persistent and follow up. Goodwill letters are a relatively simple step and a worthwhile effort you can take to help ensure you maintain good credit, which is an important aspect of managing healthy personal finances. If you have other questions about taking control of your credit, one of our expert TDECU Wealth Advisors can help.

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This goodwill letter asks a creditor to remove a late payment.

After you reviewed your credit reports, you noticed there was a late payment on one of your accounts. Maybe you forgot, maybe your payment did not get there in time – something went wrong and this has caused a blemish on your payment history. Sending a goodwill letter to this creditor, explaining what happened, may oftentimes persuade your creditor to remove the late payment notification. If you are courteous, apologetic, and explain what happened, your creditor may feel inclined to make their customer happy. The letter below is purely an example of what to say when you write your letter to the original creditor. Make sure to tailor this letter to fit your individual circumstance.

This letter is just one of our free sample credit repair letters you can use to help handle a variety of credit situations.

Date

Name
Address

Creditor
Address

Re: Acct #XXXX-XXXX-XXXX-XXXX

Dear Madam/Sir,

I am writing to you today regarding my account #XXXX-XXXX-XXXX-XXXX. The purpose of my correspondence is to see if you would be willing to make a “goodwill” adjustment on the reporting of this account to the three credit agencies.

During the time period, this account was established I was very happy with the service. I was however not the ideal customer and made mistakes with my handling of the account. I should have kept better records regarding the account and I take full responsibility. I became aware of the unpaid balance when I got a copy of my credit report in (insert date).

I know that payment was my responsibility and I am not attempting to justify this breach of my user agreement. I was however hoping you might review the circumstances under which this non-payment occurred and consider removing the negative trade line associated with this account from my three credit reports.

As soon as I became aware of the balance owed, I contacted (insert name here) and paid the balance in full. I provide this not to justify why the account was unpaid, but rather to show that the issue with (insert name here) is not a good indicator of my actual creditworthiness. I hope that (insert name here) is willing to work with me on erasing this mark from my credit reports.

I would like to stress the fact the information currently being reported is accurate. I am simply asking (insert name here) for a courtesy gesture of goodwill in having the credit bureaus remove this account from my report. I do recognize that this request is unique and that it may not be your normal policy. Please consider that the Fair Credit Reporting Act does not demand that all accounts be reported, only that any account that is reported be reported accurately. Therefore, a company does have legal discretion and permission to remove any account it chooses from the credit report. I’m hoping you will do that in my case for this account.

Your kind consideration in this matter is greatly appreciated.

Regards,

Your Signature

What is the purpose of goodwill letter?

A goodwill letter is a letter sent to a creditor (not a credit bureau) to explain a previous behaviour that negatively affects your credit rating. Perhaps you experienced special circumstances that delayed or stopped you from paying your bills on time (maybe you moved, were ill, lost your job, or were sick).

What is a goodwill letter example?

Based on my otherwise spotless payment history, I would like to request that you apply a goodwill adjustment to remove the late payment mark from my credit report. Granting this request will help me improve my overall credit history and demonstrate my consistency as a creditworthy borrower.

How do you write a good goodwill letter?

I truly believe that it doesn't reflect my creditworthiness and commitment to repaying my debts. It would help me immensely if you could give me a second chance and make a goodwill adjustment to remove the late [payment/payments] on [date/dates]. Thank you for your consideration, and I hope you'll approve my request.