Good Faith Letter: Can It Remove Late Payments From Your Credit Report?

Kelly Hernandez
Letter tiles spell out "goodwill" and are surrounded by a computer keyboard, a pen and notepad, and eyeglasses sitting on top of a financial chart document.
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A goodwill adjustment letter, also commonly referred to as a “good faith” letter, is helpful in removing a negative item from your credit report. If you have a relatively good credit history and only made one mistake but have a reason for it, sending a goodwill letter may be the best way to remove this blemish from your credit report.

If you have a low credit score and your credit history is less than desirable, don’t expect a goodwill adjustment letter to fix your report and raise your credit score. It’s important to learn more about when a goodwill adjustment letter is likely to be successful and how to use this strategy to have a negative item removed from your credit history.

What Is a Goodwill Adjustment Letter?

If you made a late payment or skipped a payment to a creditor, it’s likely to be reported as a negative mark on your credit report, which affects your credit score. If you have an explanation and valid reason for missing this payment or paying late, you can attempt to send a goodwill adjustment letter to your creditor.

This letter explains your reason for the late payment and asks that the negative mark be removed from your credit report. If you explain your situation and the reason you paid late in a polite and clear manner, the creditor is likely to sympathize with you and agree to remove the negative item from your report.

While you may feel your reason for missing a payment is legitimate, your creditor must make the decision to remove the negative mark from your report. If you’ve been a relatively good borrower and it’s rare for you to miss a payment or make a late payment, your creditor is likely to agree to erase this negative mark. However, if you commonly make late payments or skip payments altogether, it’s not likely that your creditor will sympathize and remove this negative item for you.

Reasons to Use a Goodwill Adjustment Letter

If you use a credit repair company to help build your credit, one suggestion the company may have is to send a goodwill adjustment letter to your creditor. You may want to consider sending a goodwill adjustment letter in an attempt to increase your credit score if:

  • You were late making a payment to a creditor.
  • You missed a payment to a creditor for a valid reason.
  • You rarely miss payments or make late payments to your creditors.
  • You experienced a financial hardship or situation you think a creditor may sympathize with.

Before assuming a creditor will agree to remove a negative mark from your credit report, consider the circumstances of your situation. Some of the situations that a creditor is likely to empathize with include the following:

  • You or your spouse recently lost a job.
  • Your employer was late providing your paycheck.
  • Your automatic payment didn’t go through because you switched bank accounts.
  • You moved and didn’t receive your bill in the mail.
  • You or a family member are dealing with health issues.
  • You have unexpected medical expenses or other types of financial emergencies.

If you briefly, clearly, politely, and adequately explain the financial hardship or situation you’re dealing with in your goodwill adjustment letter and you have a satisfactory payment history with your creditor, it’s likely they’ll agree to remove the negative item from your report.

How to Write a Goodwill Adjustment Letter

Before you write your goodwill letter, be sure you’re prepared with the creditor’s contact information and a legitimate reason that your payment was late or not received. To complete a goodwill adjustment letter successfully, follow these steps:

  1. Address the letter to your creditor.
  2. Introduce yourself politely and thank the creditor for reading your letter.
  3. Provide information on your account and details on the payment you missed.
  4. Briefly and courteously explain the situation and financial hardship that occurred and why you missed a payment.
  5. Reinforce your record of on-time payments and mention other positive credit history you have with the creditor.
  6. Try to appeal to your creditor’s sympathy by explaining how removing this negative item would help repair your credit and benefit your financial future.
  7. Reiterate that you’re a responsible borrower with a good history of making payments on time.
  8. Ask for the creditor to remove the negative item from your report.
  9. Thank the creditor for their time and understanding.
  10. Close the letter by signing your name.

Once you’ve sent your goodwill adjustment letter to the creditor, you may need to follow up if you don’t hear back. Call or electronically contact your creditor to ensure they received your letter and to provide more information or proof of your financial hardship if requested.

Do Goodwill Letters Work?

Even if you send a perfect goodwill letter that explains your financial hardship adequately, your creditor is under no legal obligation to remove the negative mark on your credit report. However, if you only missed one payment throughout your credit history, the odds are in your favor and your creditor may agree to forgive the late payment.

It may be harder to get debt collections removed from your credit report as opposed to just one missed payment. In this case, a goodwill letter may not work since you’ve shown a pattern of poor financial habits. When your credit history shows you’ve missed collection payments, it may be harder to convince a creditor to remove a negative mark from your report.

If you’re working on repairing your credit, it doesn’t hurt to send out a goodwill adjustment letter in an attempt to have negative items removed from your report. In addition to working on improving your credit score through financially responsible actions, a goodwill adjustment letter may also help improve your credit score.

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