How to Write a Goodwill Letter for DIY Credit Repair

Credit repair sounds good, but consumers should almost always avoid working with a “credit repair” agency. These firms typically use borderline-ethical practices that try to beat the system and often leave you out of money with no results. And the worst part is that anything worthwhile they actually accomplish can probably be done by you for free. One of these tactics is a goodwill letter, and it can be one of the most powerful tools in credit repair. Let’s take a closer look at what it is and how to use it.

What is a Goodwill Letter?

A goodwill letter is a written request to a creditor asking them to remove negative information from your credit report (called a “goodwill adjustment”). As the name suggests, you are asking the creditor for their courtesy and compassion, that they will forgive a mistake you’ve made.

Remember, This is Different than a Dispute.

One thing to keep in mind, both when you write the letter and when you receive your response, is that this is different than disputing an error. In this case, there hasn’t been a mistake on their end—you did miss a payment, end of story. The creditor, then, doesn’t owe you anything. Just keep this point in mind so that you won’t be disappointed if you don’t get the response you were hoping for.

When Should a Goodwill Letter Be Used?

You might get different answers to this question, depending on who you ask, especially if you were to talk “off the record” with a representative in the credit repair industry. In reality, this should only be used in a handful of situations:

  1. If there was a technical error in processing your payment. If you tried to pay your bill and/or encountered some sort of glitch that led to a negative mark on your credit report, that would warrant potential removal by the creditor.
  2. If autopay failed. If you set up autopay and it didn’t go through either due to a technical error (see #1) or lack of funds in your bank account, this might also warrant a removal. Perhaps it was an honest mistake that your bank account didn’t have the funds, because you had moved them for another purpose.
  3. If you have an excellent history and made one mistake. Creditors understand that mistakes happen sometimes. If you have demonstrated your ability to pay on time consistently and then one month make a mistake, the creditor might think it’s reasonable not to hold that against you.

In all of these scenarios, the creditor can see intent and attempt. It’s clear that you wanted to pay and that you tried. With this established, it’s much more likely that they will honor your request.

Other Scenarios

It’s certainly possible that a goodwill letter might be effective in other scenarios. For example, if combined with an offer to pay a lump sum for an overdue debt, it could be used to remove a collections account from your report. Or, maybe you’ve made quite a few mistakes and missed payments with multiple creditors and want to use this strategy for all of them.

We won’t advocate for this use of a goodwill letter, because there is no certainty that the offer will be accepted, and because it’s an ethical “gray area.” After all, the creditors and collections agencies are legally bound to the credit bureaus to reports accurate information, and so the ability to have this information changed should not be abused. At the same time, you obviously want to restore your credit to the best possible condition, and it likely can’t hurt to ask.

Guidelines for Writing the Letter

If you move forward with a goodwill letter, be sure it includes some key pieces of information:

  • Your account number
  • The address listed on your credit report

In addition, ensure it meets these guidelines:

  • It should be a physical letter, not an email.
  • The letter should be concise (short and sweet).
  • You should describe the issue and what caused you to miss the payment.
  • Explicitly ask for courtesy and to have the item removed form your credit report.

Letter Template

If you aren’t confident that you can create the letter from scratch, feel free to use our template. Our template is a downloadable Word doc, but here’s the meat of the letter:

To whom it may concern,

I am writing in regards to [a late payment/late payments] on my credit report from [date(s)] for my [Creditor Name] account.

I understand how important it is to make timely payments, and that failure to do so creates an inconvenience for you. However, I missed my payment because [brief explanation for missing your payment, ideally showing attempt/intention to pay]. I am confident that this won’t happen again and I have taken steps to ensure my financial responsibility moving forward. [If applicable add: Since [and/or prior to] this mistake I have a perfect record of on-time payments.]

As a courtesy, I am requesting that [Creditor Name] make a goodwill adjustment and remove the late payment on [date] from my record. This will help improve my credit worthiness and give me renewed confidence in being a [Name of Creditor] customer in good standing.

Thank you for your consideration,
[Your Name]

What to Expect

After you send the letter, you should expect a response within about two weeks, though sometimes they take much longer or don’t come at all. If you don’t hear back in couple of weeks, you should call to inquire.

The Creditor’s Perspective

How will a creditor determine whether to make the goodwill adjustment on your account? Many credit experts believe it involves a combination of the following factors:

The length of your credit history with the company.
The longer your credit history with the particular creditor, the more likely they are to offer a goodwill adjustment to you.

The length of time since the delinquency.
Creditors are typically more likely to offer the adjustment to a delinquency that happened a while ago.

Your account status since the delinquency. Paired with the point above—creditors want to know that you’ve successfully and responsibly maintained your account since the delinquency. If you have, you are much more likely to receive the adjustment. In addition to on-time payments, they might also be looking for card activity, to make sure you are actively using the account but, at the same time, not overdoing it (spending more than you can afford).

Have you already had a goodwill adjustment, particularly in the last 24 months? If you’ve been given a goodwill adjustment from the same company within the last 24 months, the chances of receiving another are extremely low.

Give Yourself some Goodwill

If you have a late payment or two on your credit report, this can be a great strategy to try, and you might get the results you are looking for. Remember that it’s much safer and cheaper than working with a credit repair firm, but it may not work out in your favor. The most reliable way to have good credit is to budget wisely, minimize credit card use and/or pay your balances in full each month. If you implement these habits, you’ll be well on your way to a healthy credit score.

Thomas Bright is a longstanding Clearpoint blogger and student loan repayment aficionado who hopes that his writing can simplify complex subjects. When he’s not writing, you’ll find him hiking, running or reading philosophy. You can follow him on Twitter.

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