What Is a Goodwill Letter to a Creditor? Examples and Free Template

One seemingly small mistake like paying a bill late can decrease your credit score for seven years. Not only does this negatively affect your credit score, but makes it more difficult to get financial approvals–never mind approvals at the best interest rates. But by writing a goodwill letter, you might just be able to get that late payment removed from your credit report. Follow along to find out if you’re a good candidate. And if so, how to write a goodwill letter.

What Is a Goodwill Letter?

A goodwill letter is a written request to a creditor about a late payment they reported to the credit bureaus. Late payments can come from credit cards, loans, or other forms of credit or financing.

If you make late payments or have other negative information on your credit report, it can lower your credit score and have a long-term impact. Negative marks can stay on your report for up to seven years. By sending a goodwill letter to your creditor, you can ask for their help in removing the negative mark from your credit report.

Goodwill Letter vs a Dispute

To clarify, a goodwill letter is not the same as a dispute. When you file a dispute, you are informing the three major consumer credit bureaus that there is an error on your credit reports. A goodwill letter serves a different purpose.

A goodwill letter is a way to ask a creditor to remove a legitimate negative mark from your credit report as an act of kindness. Instead of disputing an error with the credit bureaus, you directly contact the creditor or collection agency to request a “goodwill adjustment” by admitting to a mistake you made and asking for forgiveness.

When to Submit a Goodwill Letter

If you have a record of missing payments or other factors that indicate risk, such as having high balances on your credit card, it is less probable that the lender will grant your goodwill request. Additionally, if you don’t have a valid excuse for the mistake, like simply forgetting to make your payment, your request will be less successful.

Who is a Good Candidate For a Goodwill Letter? 

If you have a history of consistently making payments on time and a generally positive credit history, there are some situations where it might be beneficial to attempt a goodwill letter. Best case scenario, a lender may agree to remove a late payment. That is if it is an isolated incident and not something you have a history of doing.

Here are a few instances where you might qualify for a goodwill adjustment:

• Financial hardship, such as getting laid off from work and going through a divorce 
• An emergency, such as you or a loved one being in the hospital
• If your payment didn’t process because of a technical error
• You moved and did not receive the bill at your new address.
• Some other extenuating circumstance that is isolated and doesn’t happen every day

What To Include In a Goodwill Letter To a Creditor 

Writing a goodwill letter is pretty straightforward. While you should always write a personalized letter to explain your unique situation, there are a few other details you must include. For example, your name, account number, address, and of course, that you are writing to request a goodwill adjustment. 

Here’s what to include in your goodwill letter:

• Your account number
• Your address
• A brief explanation as to why this happened (and why it’s an isolated incidence)
• How you corrected the error (and thus, why it was a one-time thing)
• Request a “goodwill adjustment” to have the late payment removed

To make your point stronger, you can include relevant documents like medical bills in your letter. Also, you can get in touch with the customer service line of the company and ask for a goodwill adjustment by phone as well.

Goodwill Letter Template

If you’ve never written a goodwill letter to a creditor before, it can be helpful to use a goodwill letter template to help get you started. Keep in mind that it’s key to customize your letter so that you effectively convey how this mistake happened (and that it was an honest mistake) and that because this was an isolated incident, it’s not a mistake that will happen again.

Here’s a sample goodwill letter for missed payments on a credit card:

[download id=”2494″]

Bottom Line

A goodwill adjustment is a way of asking a creditor to forgive the mistake and show kindness by removing the negative mark. Generally, it’s best to make this request when you’ve had consistently positive credit behavior in the past and can explain away any recent mistake won’t happen again. Removing a late or missed payment can be highly beneficial to your creditworthiness, so it’s worth a shot in the instance where you have submitted a payment late.

Frequently Asked Questions (FAQs)