How To Remove Late Payments from Your Credit Report using a Goodwill Letter [2022 Guide]
December 21, 2021
How To Remove Late Payments from Your Credit Report using a Goodwill Letter
Writing a goodwill letter is a method many individuals use in an attempt to improve their credit scores. However, there are a few keys to success if you want the best chance for it to work.
The letter will need to be a combination of taking responsibility for the delinquent payments and adding facts to tell a story.
Learning how to write a goodwill letter the right way can increase your chances of removing late payments from your credit report.
How Do I Remove Late Payments from My Credit Report?
Ask the creditor for forgiveness by writing a goodwill letter, aka a late payment removal letter. Though it does not always work, some creditors allow a goodwill adjustment provided you are in good standing with them or have rare late payments.
If the goodwill letter to the creditor is successful and they forgive your late payment, your credit report can be positively adjusted.
Although this method can be somewhat hit or miss, it doesn’t hurt to give it a shot. As with any contact you make with creditors, be sure to have agreement details in writing to ensure accountability from the creditor.
You can think of writing a goodwill letter as a helpful tool within your credit toolbox. Not only will you want to write a goodwill letter, but then it is essential to stay on track in the future.
Your payment history makes up 35% of your score, so focusing on making timely payments can help boost your score. Once you get a goodwill adjustment, it is unlikely you will get the same opportunity from that creditor in the future.
What is a Goodwill Adjustment?
Late payments to a lender can not only increase fees but can have a big impact on your overall credit score. Payments made late, especially more than 30 days past due, can cause your credit score to take a hit, making it harder to get good interest rates and even qualify for loans.
If you notice a recent ding to your credit report, asking for a goodwill adjustment is an option to bring your score back up. A goodwill adjustment may be made after mailing a goodwill letter to creditor, who then agrees to make the appropriate changes to your account and report it to credit bureaus.
For example, if a borrower missed a student loan payment, which has negatively affected their credit score, a goodwill adjustment can remove the late payment from the loan history.
To get a goodwill adjustment, you will want to draft a well-written goodwill letter. If the lender reads your letter and finds details with the correct information and accountability, you may have a chance of getting a goodwill adjustment.
Once the goodwill adjustment is finalized, it can help the borrower to do what they need to do as far as using their credit. Whether it’s opening a new line of credit, applying for a loan, etc., a goodwill adjustment may be the tweak needed to raise the credit score enough to get approved.
What Is a Goodwill Letter Used For?
Goodwill letters can be used for just about any institution that has loaned a borrower money. For example, you can use a goodwill letter for student loans. Rather than mailing the letter to the credit bureaus themselves, goodwill letters go to collection agencies or other creditors.
You may also write a goodwill letter to remove paid collections. The purpose of writing a goodwill letter, in this case, is to ask the debt collection agency to take off collections that have been paid off.
A closed account goodwill letter can also be used to boost your credit score. Writing the letter will be similar to removing a late payment, but your focus will be on writing the goodwill letter to remove closed account.
It is important to note that lenders are not legally required to remove late or missed payments if no mistake was made. A well-thought-out goodwill letter could convince the creditor to make adjustments or make a positive report to credit bureaus.
Using a goodwill letter to remove charge off your report should be used sparingly rather than for consistently missed payments. If you are good about paying your debts on time, then you will be a better candidate. If you have multiple marks on your credit report or have had a habit of making late payments, a goodwill letter likely won’t be much of help.
Try not to have too high of expectations when sending out goodwill letters. This way, you won’t feel too let down if they fail. If they do succeed, then you can be pleasantly surprised. After all, the worst that can happen is they do not make changes, which keeps you where you already were. is
When Should I Write a Goodwill Letter?
The ideal time to write a goodwill letter would be right after you have a hit on your credit report. If you wait too long to write a goodwill letter, it may lessen your chances of approval.
Even though a goodwill letter may not yield the desired results, there are really no downsides to giving it a try. It takes very little time and resources, so sending a goodwill letter doesn’t hurt when you get a ding on your credit report.
The upside of sending a goodwill letter can be extremely helpful, however. You have the chance to add several points to your credit score if a goodwill adjustment is granted.
Certain creditors may claim that they “are not able to honor goodwill adjustment requests,” but don’t let that deter you. There are institutions that have made these claims but have granted other people goodwill letters, so it’s worth a shot.
How to Write a Goodwill Letter
The key to writing an exceptional goodwill letter is taking responsibility. If you accuse the lender of doing something wrong or angrily blame them, they probably won’t feel much sympathy for you.
To make things easier for the reader, be sure to put all relevant information in the top left corner of the page. Include your name, phone number, account number, address, and anything else you think they may need to identify you and your account.
You will also need to determine where you will be sending your letter. If you decide to call your lender, ask for the representative’s name to use to address them personally.
You want to ensure that you add some emotion to your letter in order to grab the creditor’s attention. This will persuade them to take the desired action knowing that there is value in making and keeping customers happy. If they believe there would be a benefit for them, this could be an excellent decision-maker for approval.
Start the letter with a friendly tone to put the reader of your goodwill letter at ease. If you have enjoyed, have had good communication and relationship with the company, be sure to add that. Add in any details that support the narrative that you have a history of being reliable.
Ensure to them that this will be a one-time request. Accept responsibility for the delinquency and own your mistake. Find a nice balance between explaining circumstances that resulted in the late payment and ensuring it won’t happen again.
If there was an emergency or sudden life change, be sure to include that. For example, did you miss a payment because of losing your job? Did you or someone else go to the hospital and cause you to take your focus off of your payments? Remember that you may need to show proof of these events before acceptance.
Be sure that you specifically request the removal of the missed or late payment from your credit report. It can be helpful to include specifically why you have been aiming to maintain a high credit score. For instance, if you want to get a mortgage loan, excellent credit will qualify you for a lower rate.
At the end of your letter, humbly ask for forgiveness and thank them for their consideration.
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