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Late payments on a credit card or other loan can have a widespread financial impact beyond triggering late fees and higher APRs. Payments made more than 30 days past due can ding your credit score, making it harder to qualify for future loans and get good interest 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.” A goodwill letter won’t always work, but some consumers have reported success. It's worth trying because these derogatory marks on your credit can last seven years.
What’s a goodwill letter?
In a goodwill letter, you ask the creditor that reported your late payments to remove the derogatory mark from your credit reports. Maybe you had an unexpected change of circumstances or financial hardship. Whatever the situation, your goal is to explain why you missed your payments and why the creditor should wipe them from the report.
(Note: If a credit report incorrectly says that you missed a payment when you did not, you should dispute the error instead of sending a goodwill letter.)
A strong goodwill 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 circumstance (for example, you lost your job but have since found a new one), or if you can show a recent track record of on-time payments. Keep it short and sweet.
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 them.
Sample goodwill letter
Here’s a template goodwill letter for missed payments on a credit card:
[your name] [your address] Account Number: [your account number]
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 [circumstance 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 circumstances 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.
Best, [your name]