How to use a goodwill letter to clean up your credit report |
Women writing a letter

How to use a goodwill letter to clean up your credit report

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If a missed payment left a black mark on your credit report, a letter to your creditor could reverse it.

You’ve pulled your credit report and discovered that it records a late payment. If the payment is now up to date — and the account hasn’t gone to a collection agency — you may be able to remove the black mark and salvage your credit score.

Enter: a goodwill adjustment letter. The letter asks your creditor for their compassion and understanding and promises that you’ll do better with your finances in the future.

While your creditor isn’t obliged to accept your request, there are ways to strengthen your case.

What is a goodwill adjustment letter?

A goodwill adjustment letter is a written request to remove a record of late payments from your credit report. In the letter, you’re essentially asking the creditor to empathize with your circumstances and wipe that black mark from your credit report.

The key difference between a goodwill adjustment error and a dispute is that you’re the one who made the mistake. You missed a payment, and your creditor doesn’t owe you anything. You have to make your case and explain why you slipped — maybe you lost your job or had to care for a sick parent — and prove that you can stay on top of your bills.

Typically, people who have experienced financial hardship and can supply a recent record of on-time payments have the most success with goodwill letters. If your account is no longer past due and your debt hasn’t been passed on to a collection agency, you have a good chance, too.

When you’ve written the letter, send it to your creditor using the address on your credit report. More on this soon, but prepare to be persistent and follow up until you get an answer.

When should I write a goodwill adjustment letter?

A goodwill letter isn’t guaranteed to work, but there are some situations that warrant writing one. Ultimately, the aim is to show intent and attempt. You wanted or planned to pay, but couldn’t for some reason or another.

If these circumstances apply to you, it may be worth penning a letter:

  • There was a technical error in processing your payment. Say you tried to pay your bill, but your creditor’s site was down or glitchy, or the phone line was busy for an unusually long time. You may be a good candidate for a goodwill letter.
  • Autopay didn’t work. If you set up autopay and it failed due to a technical error or a lack of funds in your bank account, that may warrant a removal. For the latter, explain why your funds were low. Maybe a check took longer than expected to deposit or an emergency expense popped up.
  • You made a mistake. If you can prove that you consistently make on-time payments and this slipup was out of character, you can ask your creditor not to hold that against you. For a positive outcome, point to a specific circumstance — perhaps you were busy helping a sick spouse, child or parent, or there was a death in the family.
  • You’re experiencing financial hardship. Did a financial strain prevent you from making a payment? Whether it’s a mortgage, student loan or another major expense, this group of people tend to be most successful with goodwill letters.

Tips for writing a goodwill letter

A goodwill letter requires thought and tact. After all, you’re asking for a favor from someone who doesn’t have to grant it.

For a successful goodwill letter, needs to be a physical letter — not an email. Then follow these guidelines:

  • Be polite and appreciative. There’s no point getting angry or accusatory — that will only inspire your creditor to throw your letter in the trash. Instead, write in a grateful, conscientious way that lets your creditor know you appreciate them taking the time to consider your request.
  • Keep it short and sweet. To capture the creditor’s attention, make sure your letter is simple and to the point. Tell your story in three to four paragraphs, and ask someone to proofread it before you send it off.
  • Take responsibility for your mistakes. Accountability is key. Own up to your late payment and explain — honestly — why it happened. Be specific. Did you lose your job? Were you sick in the hospital? Were you saddled with an unexpected expense, like a family member’s healthcare or funeral costs? Try not to make excuses — that won’t get you anywhere.
  • Explain how you will stay on track with payments. Next, outline your plan to make on-time payments in the future. For example, if you were unemployed for three months but have since found a job, reassure them that you’ll make payments soon.
  • Highlight your positive payment history.
    Sympathy aside, you want to gain your creditor’s trust. To do that, prove that your period of financial hardship was only temporary. If you can show that you made timely payments before and after that period, they’re more likely to cut you a break.
  • Spell out why the goodwill adjustment is so important. In an effort to get the creditor to empathize with you, tell them how the adjustment benefits you. Are you applying for a small business loan? A mortgage? Or are you trying to qualify for a low APR on a credit card? Show that you’re taking control of your finances and you care about your credit. Round out this section by reaffirming your loyalty to the creditor’s company.
  • Include your contact details and account number. To make your creditor’s job easier, note your address, phone number and email. If your credit report doesn’t contain the full account number (for security purposes), you can find it on your paperwork for that account.

Sample goodwill adjustment letter

[Your name][Your address][Your phone number][Your email]

Account number: [Your account number][Date]

To whom it may concern,

Thank you for taking the time to read this letter. I’m writing because I noticed my most recent credit report reported a late payment on May 2019 for my [name of account] account.

I understand how important it is to make on-time payments and that a failure to do so is a huge inconvenience to you. I missed that payment because my father fell chronically ill, and I had to take unpaid leave to care for him. In addition, I had to withdraw from my savings to pay for his exorbitant healthcare costs.

I realize I made a mistake in falling behind with my payments. Up until that point, my payment history with you was positive, and I’m proud of that. Now that my father is in remission, I’m back at work full time and those payments are a priority. I’m in control of my finances and confident this won’t happen again.

I would be extremely grateful if you could remove the late payment from my credit report. I’m planning to apply for a mortgage, and that blemish could hurt my ability to qualify. Given my history, I don’t believe it reflects my creditworthiness or my standing as a good [name of creditor] customer.

Thank you again for your consideration,[Your name]

Your goodwill adjustment letter checklist

For the speediest response, include these documents and details in your letter:

  • The account number for your loan
  • Your name, address, phone number and email
  • Previous payment statements to show you’ve paid on time except during that period of financial hardship
  • Identifying documentation — just so the creditor knows you sent the letter

What happens after I send the letter?

Once you send in the letter, you can expect a response in two to three weeks, though sometimes creditors take much longer — or don’t respond at all.

Your creditor will accept or reject your request for a goodwill adjustment and confirm if they will erase the black mark on your credit report.

If you haven’t heard back within a few weeks, call or email the creditor to check the status of your request. You may have to be persistent and follow up multiple times, particularly if the company uses a customer service team to field calls.

You can also try to schedule an in-person meeting with your creditor. This humanizes your request and gives you a second chance to explain your case.

If you do get in contact with your creditor, reaffirm your loyalty to the company and your history of positive, on-time payments. Emphasize that the missed payment was a one-time occurrence and that you’re back on track with your finances.

Remember, your creditor isn’t obliged to grant you a goodwill adjustment. If you reach a dead end, you can contact the credit bureau in charge of your credit report or enlist the help of a credit repair agency.

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Bottom line

The purpose of a goodwill letter is to repair your credit by asking a creditor to remove a late payment from your credit report. It’s not guaranteed to work, but in some situations, it’s worth a try.

If you can explain why you missed the payment and how you’ve recovered from financial hardship, you might be a good candidate for a goodwill adjustment letter. There’s a power in owning up to your mistakes, but know that your creditor isn’t obligated to accept your request.

Learn more about how to fix your credit score with our comprehensive guide to credit repair.

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