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Payment history is the biggest factor in determining your credit score—even one late payment can drive your score down. If you are late making a payment, but have an overall good payment history with a lender, you might be able to convince them to not report it to the credit bureaus (and keep it off your credit report).
One way you can request assistance is by sending your lender a goodwill letter.
What Is a Goodwill Letter?
A goodwill letter is a written communication that asks your lender to not report your late payment to the credit bureaus, or to remove their reporting of a late payment, so it doesn’t impact your credit history. You might also ask for other considerations, such as courtesy removal of a late payment fee.
Your lender is not obligated to honor your goodwill letter—this is a request for a favor.
When Should You Use a Goodwill Letter?
Goodwill letters are a good tactic when you actually have goodwill to trade on. Usually, that means that you’re a responsible account holder who has (up until now) paid on time. It helps if you have a long, positive history with your lender, which will help demonstrate your record as a good borrower.
Do Goodwill Letters Work?
Goodwill letters can work. Remember that you’re a customer, and if you’re a responsible account holder, you’re valuable to the lender. They want to keep you, and lenders are often willing to overlook one late payment as a courtesy to keep account holders happy.
Writing a Goodwill Letter: Dos and Don’ts
Even if you’re a valuable account holder, remember that the mistake is on you if you’re late with a payment. That means you need to write a tactful letter that follows a few best practices. These don’t guarantee that a lender will help you, but they may increase the chances.
Do Use a Positive Tone
Be positive, especially about your relationship with the lender. Mention your positive payment history and that you enjoy doing business with them. This helps remind them that you’re a valuable customer without you stating that outright.
Don’t Be Overly Emotional
Be honest about the circumstances that led to the late payment, but avoid getting emotional. For example, you might let the lender know that you missed a payment in part because you lost your job and it was a difficult few months as you worked to recover from that. But now you have a new job and are working to return to a positive payment history. It’s okay to let the lender know this, but avoid turning it into a sob story.
Do Take Responsibility
Regardless of the reason you missed a payment or were late, acknowledge that you made the mistake. Apologize for the inconvenience, and let the lender know you will work to ensure it doesn’t happen again.
Don’t Be Long-Winded
Be concise. Most goodwill letters are going to come in under a page typed. A short, to-the-point letter helps ensure someone reads the entire thing and reduces chances for miscommunication.
Do Provide All Relevant Details
Include everything the lender needs to identify your account and the issue in question. That can include account numbers, dates and attachments such as past statements.
Don’t Forget to Follow Up
A goodwill letter is not official, and your lender isn’t obligated to respond. That means the burden is on you to follow-up with your request with a phone call to ask whether your letter was received and if the lender can help you.
And remember that a goodwill letter is just one tool for improving your credit. If you have more than a late payment, you might want to explore other credit repair options.
Sample Goodwill Letter
Not sure how to go about writing a goodwill letter? Use the template below as a guide to get started. It includes all the elements that are generally important to include.
(Date)
Re: (Your account number)
Creditor name and address
To Whom It May Concern:
My name is (your name), and I’ve been a customer of (creditor name) since (date your account was opened). During that time, I have (in a single sentence, describe your positive relationship or payment history).
However, I experienced a temporary issue that caused me to miss a payment uncharacteristically. (Explain in a few sentences and no more than two short paragraphs why you missed the payment.)
I apologize for this lapse in my normally timely payments and wish to ensure you that I am in a position to make future payments on time. I regret the temporary lapse but hope you will be understanding of the circumstances.
I’m asking that you give me a second chance and help me protect my credit history. Specifically, I’m asking you to remove the late payment item from my credit report.
Thank you for your time in considering this matter. Please let me know if you need further information.
Sincerely,
(Your name)
