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Late payments on a credit card or loan can have a widespread financial impact beyond triggering late fees and higher interest rates. Payments made more than 30 days past due can ding your credit score, making it harder to qualify for future loans and get good rates.
One possible solution: You may be able to remove late payments on your credit reports and start to improve your credit with a “goodwill letter.”
What is a goodwill letter or late payment removal letter?
In a goodwill letter, sometimes called a late payment removal letter, you ask the creditor that reported your late payments to remove the derogatory mark from your credit reports. Without the "goodwill" of a creditor to remove those marks, they remain on your credit report for seven years — though the impact on your score fades with time.
Your goal is to explain why you missed your payments and why the creditor should wipe them from the report.
Do goodwill letters work?
Certain banks like Chase and Bank of America state that they will not honor a late payment removal letter because they are legally obligated to report a complete history of your financial behavior to each of the credit bureaus. But some consumers have reported success when they've sent a goodwill letter.
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A strong late payment removal letter asks the creditor to empathize with you. It’s pleasant and courteous. It shows that you take responsibility for your missed payments and demonstrates that you’ll stay current on your bills in the future.
It helps if you can point to a specific circ*mstance, or if you can show a recent track record of on-time payments. Keep it short and sweet.
You might consider writing a goodwill letter if you missed one or more payments due to a medical emergency, a divorce, job loss, or a natural disaster. An issue with mail delivery due to a move could be another valid reason to write a goodwill letter.
Once you’ve written the letter, send it to your creditor using the address listed on its website or on your credit report. You might have to contact the creditor multiple times or follow up with a phone call. Persistence may help persuade the creditor.
Goodwill letter template
Here’s a sample goodwill letter for missed payments on a credit card:
[your name]
[your address]
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 that my most recent credit report contains [a late payment/payments] reported on [date/dates] for my [name of account] account.
I want you to know that I understand my financial obligations, and if it weren’t for [circ*mstance that caused you to miss a payment], I’d have an excellent repayment record. I made a mistake in falling behind, but since then, [description of how your circ*mstances have changed or how you’ve improved your money management]. Since then, I’ve had a spotless record of on-time payments.
I’m planning to apply for [a mortgage/auto loan/etc.], and it’s come to my attention that the missed payment on my record could hurt my ability to qualify. I truly believe that it doesn’t reflect my creditworthiness and commitment to repaying my debts. It would help me immensely if you could give me a second chance and make a goodwill adjustment to remove the late [payment/payments] on [date/dates].
Thank you for your consideration, and I hope you’ll approve my request.
A goodwill letter is different from a credit dispute letter. A dispute letter asks the credit bureaus to correct a mistake that was made on your credit reports. These mistakes could include a wrong account number, an account you don’t recognize or a payment reported late when it wasn’t. A goodwill letter asks the original creditor for forgiveness for a mistake you actually made, like missing a payment.
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Tips for avoiding late payments
Writing a goodwill letter may or may not successfully remove a late payment from your reports. Regardless of the outcome, following a few best practices can help you avoid missed payments in the future and protect your credit.
Keep track of payment due dates. Check your statements or log in to your online accounts to verify when payments are due each cycle. Some creditors allow you to change your payment due date, so if yours is inconvenient, ask about making a switch. Consider setting calendar reminders on your phone or computer to alert you as the date approaches.
Make frequent payments. Getting in the habit of making smaller, recurring payments throughout the month can help you knock out your balance before your due date. Carrying a smaller balance also lowers your credit utilization, which is a good way to build your score.
Schedule automatic payments. You can set up regular transfers from your bank account to ensure you pay your bills on time. Aim for at least the minimum payment amount.
I truly believe that it doesn't reflect my creditworthiness and commitment to repaying my debts. It would help me immensely if you could give me a second chance and make a goodwill adjustment to remove the late [payment/payments] on [date/dates]. Thank you for your consideration, and I hope you'll approve my request.
Section 609 gives consumers the right to request information related to debts listed on their credit reports. Examples of information that you may want to dispute include: Accounts opened due to identity theft. Late payments that were paid on time.
There's no guarantee that a goodwill letter will work, and there's no officially approved formula to follow in order to give yourself the best chance of success. Keep in mind that because creditors aren't required to consider your request, you may get no response at all.
I truly believe that it doesn't reflect my creditworthiness and commitment to repaying my debts. It would help me immensely if you could give me a second chance and make a goodwill adjustment to remove the late [payment/payments] on [date/dates]. Thank you for your consideration, and I hope you'll approve my request.
If you act quickly by paying within 30 days of the original due date, a late payment will generally not be recorded on your credit reports. After 30 days, you can only remove falsely reported late payments. It's a good idea to regularly check your credit scores and reports.
If the creditor stands by the reported late payment, it won't remove or update the information. But if it agrees that the information is incorrect, the creditor has to tell the credit bureau to update or remove it.
Late payments can stay on your credit reports for up to seven years. If you believe a late payment is being reported in error, you can dispute the information with Experian. You can also contact the original creditor directly to voice your concern and ask them to investigate.
Do goodwill letters work? While there is never any guarantee that a goodwill letter will be successful, they have the best chance of working when the borrower and the lender have a good relationship.
Dear [Name], This is a friendly reminder that we haven't received payment for invoice [Invoice Number]. The payment was due on [Due Date]. We're not aware of any outstanding issues or reasons for non-payment, so we would like to respectfully ask you to make payment as soon as possible.
Section 611 is invoked when a credit bureau responds to your dispute and says it has verified the information. Once you identify what kind of letter you need to write, you'll need: Your name, address, phone, and other identifying information. The information for the credit bureaus' you want to contact.
The invoice was due on [Due Date], and payment is now overdue by [Number of Days Overdue]. Be advised that late payment interest may be applied if we do not receive payment within 30 days. Let us know when we can expect to receive payment for the outstanding invoice.
Explain the significance of the goodwill adjustment
Show that you're in charge of your money and that your credit matters to you. Make them understand that their positive feedback in response to your letter will benefit your personal finance and business relationship.
An example of a goodwill message is a company sending a season's greetings message to its employees. This type of message expresses appreciation for the work that the employees have done throughout the year and makes them feel valued.
Introduction: My name is Barbera Armstrong, I am a lovely, delightful, cooperative, funny, enchanting, vivacious, tender person who loves writing and wants to share my knowledge and understanding with you.
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