What Is a Goodwill Letter and How Do You Write One?

What Is a Goodwill Letter?

When you write a goodwill letter, you ask a creditor—such as a lender or credit card issuer—to remove an accurate negative mark from your credit report as a favor to you.

Goodwill letters won't resolve a history of delinquency across multiple credit accounts or more serious negative marks like charge-offs, accounts in collections or bankruptcy. They're best used for removing a single late payment, or a few late payments resulting from the same extenuating circumstance, from your credit report.

It's worth a try: Even one late payment can have a significant negative impact on your credit scores, especially if you have an otherwise sterling credit history. It can also stay on your credit reports for up to seven years.

Goodwill Letter vs. Credit Dispute Letter

A goodwill letter is different from a credit dispute letter, which requests that the creditor remove inaccurate information from your credit report. It is more urgent to send a credit dispute letter, since inaccurate data that unjustly affects your credit scores should be removed or corrected as soon as possible.

You have the right to dispute credit report information, and it's important to do so when you notice incorrectly reported late payments, accounts whose status is falsely reported as open or closed, or errors that could be the result of identity theft, such as accounts you never opened.

Make sure they're handled swiftly by filing a credit dispute online with each of the three credit bureaus or mailing each a dispute letter with supporting documentation.

Learn more: How to Check Your Credit Report and File Disputes

When Should You Write a Goodwill Letter?

It's a good idea to write a goodwill letter when:

• You have a justifiable explanation. Perhaps you missed a payment because you were dealing with a natural disaster, health emergency or other circumstance that was out of your control. In those cases, it was likely very difficult for you to pay by the due date, and a creditor may recognize the hardship and remove the late payment.
• You're experiencing unforeseen financial hardship. If you're currently in a situation that affects your ability to make payments, such as a layoff, a spouse's death or divorce, you can explain it to the creditor and ask for a one-time adjustment to your credit report. When the hardship extends beyond one or two missed payments, you can write a hardship letter requesting a longer-term change to your account, such as a lower interest rate or payment pause.
• You've since brought the account current. Creditors may be more likely to respond favorably if, after your late payment, you've since made all payments on time. If you show that you're a trustworthy customer who will continue to give the company business, they may be more willing to make the effort to keep you as an account holder.
• You have a history of on-time payments. Similarly, if before you made the error your payment history showed you were a responsible cardholder or loan customer, you're likely to have more success with a goodwill letter.

How to Write a Goodwill Letter to a Creditor

Here are some tips for making your goodwill letter as strong as possible:

• Lead with accountability. Acknowledge the error and express your intent to make payments on time going forward. Include the necessary details, including your account information and the due date of the past-due bill, so that the creditor doesn't have to go searching for the information.
• Keep the explanation brief and specific. Rather than over-explaining, share the most important information regarding why you missed the payment, including dates of any layoffs or other relevant events or circumstances.
• Make a clear ask. State plainly that you are writing to request the creditor remove the late payment from your credit reports.
• Keep it professional. Refrain from embellishment, lies, threats or extensive explanations of how the negative mark on your credit reports is affecting you. Express your gratitude for the creditor's time and assistance and provide your contact information if it has any questions.

Goodwill Letter Template

Follow this guideline for how to write a goodwill letter to a creditor:

What if My Goodwill Letter Is Rejected?

It is possible your request for a goodwill adjustment will be rejected. Many creditors state that they must report all payment history accurately according to the Fair Credit Reporting Act (FCRA), and that they will not adjust their reporting of accurate credit information.

If you've received a rejection, here are some next steps to take:

• Apply for the creditor's hardship program. In the event that you're still experiencing financial difficulties, you can try to prevent future late payments from further hurting your credit by asking for hardship assistance. You may be able to get relief on credit card, auto loan, student loan or mortgage payments, depending on the creditor's policies. That could be in the form of lower payments, lower interest rates and more. Call the creditor's customer service line to ask about its hardship options.
• Explain your late payment to future creditors. Even if you can't remove a negative mark from your credit reports, it doesn't have to sink your hopes for getting new credit in the future. You can explain in a letter to any lenders you're seeking to work with why you missed the payment and demonstrate how you were able to bounce back.
• Wait for your late payment's impact to diminish. While a late payment can stay on your credit report for up to seven years, it won't have the same impact on your credit score that whole time. As long as you continue to make all bill payments by the due date, one late payment's effect on your credit may lessen as time elapses.

The Bottom Line

A goodwill letter can be a powerful tool to remove a one-off late payment from your credit report, if the creditor agrees to make the adjustment. There's a chance, however, that it won't work, and that you'll have to consider other ways to improve your credit or get financial assistance if you need it. Check your FICO^® Score^Θ regularly, which you can do for free by signing up for an Experian account, and plan to address any additional issues that could be affecting your score.