How Writing a Goodwill Letter Could Help Improve Your Credit Score

Could you boost your credit score just by writing a letter? Find out here. Image source: Getty Images.

A high credit score is essential to get approved for financing and to get loans at favorable rates. Unfortunately, even a single past mistake could knock more than 100 points off your score.

If you have a late payment or other adverse credit event in your past, it can be frustrating to see the impact this has on your score even years later. But, did you know you might be able to do something about it? You could write a goodwill letter.

What is a goodwill letter?

A goodwill letter is a letter you write to a creditor who is reporting a late payment on your credit report or who is reporting something else negative on your credit history, such as an account that was sent to collections.

When you write a goodwill letter, you ask the creditor to remove the adverse event from your credit report. You're not disputing that the late payment or other mistake happened -- you're just asking the creditor if they might be willing to stop reporting the negative info as a gesture of good faith.

How to write a goodwill letter

When you write a goodwill letter, specify what specific piece of negative information you want removed from your credit report. And, provide a little bit of information about why you're asking the creditor for this favor.

You could explain that you've always paid your bill on time but a family emergency or a medical situation caused you to be late on a payment. Or, you could explain the bill was sent to your old address and you missed it. Your reasons for the request will be your own, but you should always make sure your letter is polite, short, to-the-point, and makes clear exactly what you're asking the creditor to do.

If you're not sure where to get started, you can look online for samples and templates you can use. You should also include supporting evidence if you can. For example, if you missed a payment because you got into a car accident, consider including the police report from the crash to show you aren't lying.

Who should you send your goodwill letter to?

You could send your goodwill letter to the finance or billing department of the creditor who is posting the negative information. However, some experts suggest you may have better luck sending the letter to customer service or even hand-delivering the letter to a manager at a local branch of the financial institution if you can.

You'll want to make sure the letter was received and got to the right hands, so you should also follow up with a phone call or email around 30 days after sending a letter.

Will a goodwill letter work?

Many people have had success writing goodwill letters to get late payments or even more serious adverse events removed from their credit report. But, there's no guarantee a creditor will be responsive to your request to stop reporting the negative information.

Creditors are under no obligation to stop reporting negative information that's accurate. They're much more likely to do so if you've generally been a good customer, if you have some justifiable reason for the adverse credit event, and if you are polite in your request. If you've repeatedly paid late or are currently behind, on the other hand, there's a very slim chance the creditor will want to help you out.

If you are unsuccessful the first time, you could always try again in a few months and hope you get a customer service agent who is more willing to help you.

Writing a goodwill letter can be worth the effort

Writing a goodwill letter takes only a few minutes and it could lead to a big increase in your credit score if your creditor is willing to stop reporting a late payment or other negative info. Since getting a negative removed from your report can be one of the fastest and easiest ways to boost your credit, writing a letter is worth a try.