What Is a Goodwill Letter and How to Write One

Most negative items on your credit report, including late payments and collections, stay on your report for seven years. Even a single missed payment can damage your credit.

If a one-off derogatory mark is compromising your credit, you might be wishing you could remove it now instead of waiting for years. While it’s far from a guarantee, a goodwill letter might convince a lender to remove the item that’s holding you back.

Take a closer look at how to write a goodwill letter and how this tool could potentially help you build positive credit history.

What is a goodwill letter?

A goodwill letter is a letter sent to a creditor or lender to ask them to remove a negative item from your credit report. It’s called a “goodwill” letter because you’re asking the lender to act on their own goodwill.

Lenders have no obligation to remove accurate items from your credit report, and many have policies that bar them from accepting goodwill letters at all. But it could be worth a shot in certain situations.

Some goodwill letters have a better chance of being accepted than others. If one or more of the following apply to you, you may have a better-than-average chance of success:

• You’re asking for the removal of a single negative remark
• Aside from the negative item you’re asking about, you have a positive payment history
• You’ve made all payments on time since your late or missed one
• You experienced serious hardship or have another legitimate justification for the item

Lenders are generally more likely to approve requests related to circumstances beyond your control. For instance, if you were the victim of a natural disaster or were experiencing a serious medical crisis, your lender may be more likely to accept your request than if you just forgot to pay.

When to send a goodwill letter

Not sure if you should send a goodwill letter? Here’s a quick look at your likelihood of success depending on the negative item you want to ask about:

Late payments

Generally, goodwill letters ask lenders to forgive minor delinquencies. If you ask a creditor to remove a single 30-day late payment from your report, you have a reasonable chance of success.

Some lenders will even grant a request to remove longer delinquencies if they are the clear result of a significant hardship.

Collections accounts

Many lenders are less willing to forgive charge-offs or other major delinquencies. If you have a debt in collections and the debt now belongs to a third-party debt collector, success could be even less likely.

There’s also a negotiation worth trying with debt collectors called pay for delete, where you offer to pay the debt in exchange for the collector removing the account from your report. Most collectors can’t agree to this (in most cases, only the original creditor can authorize a deletion), so a realistic fallback is asking that the account be reported paid in full.

Other negative marks

Goodwill letters usually won’t work for serious delinquencies like foreclosures or student loan defaults.

If your negative mark is a federal student loan default, rehabilitation is a better route than a goodwill letter. Completing a rehabilitation agreement removes the default status on the loan, though late payments reported before the default remain. Consider speaking with a financial advisor or other professional for guidance specific to your situation.

Learn more >> What’s the importance of on-time payments in building credit?

How to write a goodwill letter

To write the strongest goodwill letter you can, you’ll want to include key information and approach the request with the right tone.

What to include

In any goodwill letter, make sure to state your account information, including the account number and the date of your missed payment, if applicable. Because you’re asking the lender for a favor, it’s best not to make them go digging for your information as well.

Here are some other important elements to include:

• Your name and contact information
• A brief explanation of the circumstances that led to your missed payment or other error
• A mention of the steps you’ve taken to make sure the same issue won’t happen again
• A clear request for a goodwill adjustment

Remember to thank the lender for their time and include a polite sign-off.

Tone and framing tips

Lenders aren’t obligated to honor your request, so tone matters. A demanding or threatening tone is likely to backfire.

Focus on embracing accountability in your letter, too. Goodwill letters work best when there’s an explanation, like a job loss, medical event, or genuine one-time event.

If it sounds like you’re blaming a late payment entirely on outside circumstances, your lender might think you’ll do it again in the future.

Where to send your goodwill letter

Even if a given lender responds to goodwill letters, they are unlikely to advertise that fact. So where should you mail your letter?

Check your account statement for a customer service address or correspondence address. If your letter is about a credit card payment, look at the back of your card to see if there’s an address listed.

If you see both physical addresses and email addresses listed, you can decide whether you want to send your letter by post or as an email.

What to do if your goodwill letter is denied

Many creditors have internal policies that prohibit them from accepting goodwill letters. Even if your letter is polite and well-written, there’s still a chance it won’t be approved.

That doesn’t mean you should give up. If a lender denies your letter, you might consider trying one or more of the following:

Ask about hardship programs

If you’re continuing to struggle with payments or think you may in the near future, ask your lender about any hardship programs they offer. Many lenders will briefly pause payments, lower your monthly payment amount, or lower your interest rate to help you get back on your feet.

Wait for the payment impact to diminish

Late payments and most other negative items stay on your report for seven years, but they carry less weight as they age. That's worth knowing — though waiting isn't a plan on its own. The faster route is adding positive payment history while the old marks age out, so your report is improving from both directions at once.

Explain the negative item to future creditors

If you need to apply for credit in the near future and you’re worried about the negative item’s impact on your credit profile, you might be able to briefly explain the situation in your application. If a new creditor sees that the derogatory mark was the result of genuine hardship and that it was a one-off event, they might disregard it while considering your application.

This works only where a human reviews your file, however. Mortgage lenders routinely ask for a letter of explanation covering past late payments, and some credit unions and community banks will consider one. Most credit card and auto applications are scored automatically with no place to explain, so don't count on it outside manual underwriting.

Keep the momentum going with Kikoff

A successful goodwill letter removes one negative mark, but it doesn't add anything positive. Payment history being the biggest factor in your score, and what you build from here matters more than what you erase.

Kikoff's Credit Account reports your on-time payments to all three credit bureaus, with no credit check to join. Every month you pay on time adds to the payment history record credit bureaus track.