What is a goodwill letter?
A goodwill letter is a letter you write to your creditor asking them to remove or alter information on your credit report, such as a late payment or closed account. A goodwill letter can also be called a:
- Forgiveness letter
- Forgiveness removal letter
- Goodwill adjustment letter
- Goodwill deletion request letter
- Late payment removal letter
Having negative marks on your credit report can lower your credit score and make getting loans, lines of credit, and favorable interest rates more difficult in the future. A goodwill letter is a risk-free option for getting these negative marks removed or having them changed so that they’re less harmful to your credit score.
Note that goodwill letters are designed for getting creditors to remove accurate information from your credit report; if your credit report contains an error, then you need to dispute it on your credit report. To do this, send a dispute letter to your creditor and to whichever credit bureaus are reporting the mistaken info.
The three main credit bureaus are:
What does a goodwill letter do?
A goodwill letter urges your creditor to take sympathy on your situation and remove or change one or more negative mark on your credit report, such as:
- Late payments
- Collection accounts
- Closed accounts
- Removed accounts
Negative information usually stays on your credit report for up to seven years (up to 10 years for some types of bankruptcies), and can impact your credit score for years. 1 By sending a goodwill letter to your creditor, you’re asking them to help you move on so the negative mark doesn’t continue to damage your lending prospects in the future.
What should a goodwill letter say?
A goodwill letter should explain why your payment was late, say that you’re sorry for the misstep, and promise that it won’t happen again. The goal is to convince your creditor that you missed your payment because of an honest mistake or because of financial difficulties outside your control that you shouldn’t be penalized for.
Your goodwill letter also needs to address how you’ll avoid similar situations in the future. To persuade your creditor to remove the negative item from your credit report, you need to assure them you’ll be a more reliable borrower from now on.
Do goodwill letters work?
Goodwill letters don’t always work. Whether or not your goodwill letter will succeed depends on your creditor and your relationship with them.
Creditors have no obligation to respond to goodwill letters. In fact, there’s no guarantee that they’ll even read yours.
With that said, sending a goodwill letter is risk-free and inexpensive. Even if it doesn’t work, there’s no harm in trying.
There are a few steps you can take to boost your chances of success:
- Send the letter as soon as you notice the missed payment: If you notice a late payment on your credit report that you didn’t know you had, pay it off right away and send your goodwill letter soon afterwards.
- Be sincere: If your life circumstances are making it hard for you to pay your bills on time, then don’t simply say that you forgot to pay them. Your creditor may be able to detect your insincerity, and they might not sympathize with you the way they would if you’d just been honest.
- Don’t neglect smaller items: It’s difficult to get the bureaus to delete big offenses like charge-offs or closed accounts. You’ll have better luck with smaller requests, like getting late payments removed from your credit report. Ask for a goodwill deletion for any items that you think you might be able to get removed. You’ll have better luck with smaller requests, like getting late payments removed from your credit report.
Get the agreement in writing: Make sure to get the agreement in writing in case you need to remind your creditor about it later on.
When to use a goodwill letter
You should send a goodwill letter to your creditor when you have a late payment or another derogatory mark resulting from an oversight or from circumstances outside your control—in other words, when you have a good excuse for not having paid your debt on time. Your letter will have the best chance of succeeding if you have a good relationship with your creditor and an otherwise solid payment history.
Common circumstances in which you should send a goodwill letter include:
- Your bill went to the wrong address because of a recent move or a mailing error
- You thought your account was set to autopay, but it wasn’t
- You switched banks and forgot to transfer the bill payment
- A recent event (divorce, unemployment, illness, natural disaster, or another emergency) left you temporarily unable to pay your bills
- The late payment was the result of an incident out of your control, such as the bank’s servers being down when you transferred the funds
Whatever the reasons for your late payment, keep your explanation straightforward and concise. You should also include supporting documentation or references if there was an external factor that contributed to your late payment (like a technical error).
How to write a goodwill letter
When you write your goodwill letter, do the following:
- Provide your details: Clearly state your name, address, and account number.
- Make your goodwill deletion request: Explicitly state that you’re writing to request a goodwill deletion or goodwill adjustment.
- Explain the situation: Explain why you weren’t able to pay the account on time. Be honest but brief and take responsibility unless the situation was entirely out of your control.
- Provide proof: If there’s proof of an incident that led to your late payment (like an email from your bank apologizing for server delays or maintenance errors), include that documentation in your goodwill letter.
- Outline your plan: Tell your creditor how you’re going to prevent similar incidents from happening in the future. For example, you can tell them that you set up autopay, or that you recently got a new job and your finances are more stable now.
- Express gratitude: Thank your creditor for their time and consideration.
If the thought of writing a goodwill letter from scratch is overwhelming, you can create it using a goodwill letter template, although it’s still important to modify the letter to reflect your circumstances.
Once you’ve written your goodwill letter and gathered relevant supporting documents, you can either print your letter and send it to your creditor by certified mail or email it to them. You can find the appropriate address on your most recent bill.