What is a Goodwill Letter?

What is a Goodwill Letter?
A woman looks at her computer.

A goodwill letter is a written correspondence that asks creditors to remove negative remarks from your credit reports. A creditor might be willing to take such action based on a demonstrated effort on your part to handle credit and finances more responsibly or a good history with the individual creditor.

Creditors are never obligated to remove accurate negative items simply because you ask. And in some cases, creditors may not be able to remove the items due to internal policies or agreements with the credit bureaus. But making the request only takes a bit of your time, so it might be worth it. Discover more about goodwill letters and how you can use them when taking control of your credit.

What Goodwill Letters Can Remove

Goodwill letters are more likely to work on smaller negative items, such as late or missed payments. That’s because many creditors have agreements with credit bureaus that they will not negotiate with individuals to have repossessions, collections accounts or charge-offs removed in exchange for payment.

Goodwill letters also rely on some type of goodwill between the borrower and the lender, and if you’re already in collections or have a long history of making late payments, you might not have good enough standing to successfully make the request. While you’re free to send a goodwill letter anytime, they are—generally—most effective for attempting to get marks related to recently missed payments or one-time negative issues removed.

How Long Does a Goodwill Letter Take?

A goodwill letter is an unofficial letter sent to the creditor. As such, there’s no timeline requirement or even an obligation on the creditor to respond to the letter. How long the letter takes to generate a response—or if any response is generated—varies.

A goodwill letter is not an official credit dispute letter. When someone finds an inaccurate item on their credit report, they can send a dispute or verification letter to the credit bureau. This prompts the credit bureau to launch an investigation, which comes with specific timelines that must be followed by the credit bureau and any creditor that is asked to provide documentation for the negative item.

How to Write a Goodwill Letter

Write a goodwill letter as you would any business-related correspondence. Type and print it, and keep it professional, clear and concise.

While you can provide the details about the reasons for a lapse in payment or another negative factor, a goodwill letter should not focus on the emotional aspects. The goal should be to show the creditor that the issue was not indicative of how you normally handle credit or that you have substantially improved how you handle credit.

This helps the creditor see you as a more valuable client, which can encourage them to do a goodwill favor for you. The goal of a letter should not be to make the creditor feel sorry for you.

When writing your letter, include details that can help the creditor identify your account and the negative item in question. Then, provide a short description of why you think the creditor should remove the negative mark. You should include:

  • Your account number
  • The date and type of issue that occurred
  • Information that identifies the negative mark
  • Information about how long you have had a relationship with the creditor
  • Information that shows this is not habitual behavior for you
  • Sincere regret that this occurred
  • A specific call to action that explains what you are asking of the creditor

Goodwill Letter Example

Re: Account No. XXXXXXX

Creditor Name
Creditor Street Address
City, State Zip Code

To Whom It May Concern:

I’m writing this letter to express my gratitude as a long-time customer of (Creditor Name) and to discuss a concern regarding my account. Specifically, I would like to discuss an item posted to my credit report regarding this account and request that it be revised.

My account with (Creditor Name) began on (date). Since that time, I have enjoyed excellent customer service and benefits and have been happy with (Creditor Name). I have also been a customer in good standing, paying my account in a timely manner and (include any other information that identifies you as a valuable customer, such as whether you qualified for loyalty programs).

However, (provide a short narrative of the events that led up to the missed payment, keeping it to a few sentences at most. For example: However, in May 2010, I was in a major car accident and spent a week in the hospital. This led to a temporary decrease in my income and obvious medical bills. While I was able to bounce back financially and now am continuing to pay all my debts as owed and in a timely manner, the first month after my injury was difficult financially, and this is when I missed that single payment.).

I wish that I was able to continue with payments in my normal manner during that time and regret that I wasn’t able to do so. Following that personal emergency, I’m working hard to repair any damage done to my credit and personal financial life, and I’m reaching out to you for support in that effort.

I’m asking that (Creditor Name) give me a second chance at a fully positive credit history with your organization by removing the late payment mark from my credit report with all three credit bureaus. Please let me know if there is anything else I can provide to support you as you consider my request.

Thank you for taking the time to consider this request. Sincerely,
(Your Name)