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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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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.
This letter should include a sincere apology for the delay, a brief explanation of the reason for the delay, and a clear timeline for when the payment will be made.
Ask the lender to remove it with a goodwill letter
In some cases, creditors are willing to make a goodwill adjustment if your payment history has been good or if you have a good relationship with them. The process is easy: simply write a letter to your creditor explaining why you paid late.
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.
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.
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.
Dear [Contact Name], I apologize that we have not yet been able to fill payment for invoice [Insert Invoice Number]. We are currently experiencing [cash flow issues, etc.] that are preventing us from being able to make payments in a timely manner.
I am sorry that you have not yet received my payment this month. I recently found an error in my account and didn't want to send the payment until I was sure that check would not be returned. The bank has since accepted responsibility for the error, and I plan to have the funds transferred to you immediately.
Following the 5 S's of goodwill messages, a typical thank-you email message for a favour might look like the following: Notice that this message is short, specific to the situation that prompted it, sincere, relatively selfless, and spontaneously sent the day of the incident that prompted it.
I'm requesting a goodwill adjustment since the payments do not reflect my current payment status. Thank you for your time reading this letter and the consideration you've given my situation. Remember to briefly state what caused the late payments and mention that you've since mended your ways.
A late payment will be removed from your credit reports after seven years. However, late payments generally have less influence on your credit scores as more time passes. Unpaid debts and debts in collections also generally come off your credit reports after seven years.
Use language such as “Payment due” instead of “Net 30” to be as clear as possible. Indicate on the invoice at what point customers will be charged a late fee and the percentage or dollar amount of that fee. Consider offering an incentive for early payments and/or cash on delivery. Keep on top of late payers.
We're writing to inform you that your account is now 30 days past due. The amount of $xx was due on [insert date]. We sent you a past due notice on [insert date] and did not receive a reply. This matter requires your urgent attention.
Address: 5789 Michel Vista, West Domenic, OR 80464-9452
Phone: +97313824072371
Job: Education Orchestrator
Hobby: Lockpicking, Crocheting, Baton twirling, Video gaming, Jogging, Whittling, Model building
Introduction: My name is Rob Wisoky, I am a smiling, helpful, encouraging, zealous, energetic, faithful, fantastic person who loves writing and wants to share my knowledge and understanding with you.
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