How a goodwill letter wiped a $ 10,000 debt off my credit report


My parents were in the middle of a long, drawn-out divorce when I went to college. My tuition fees became embroiled in litigation. This created a lot of confusion and ended up leaving school early with an overdue bill of $ 10,000 for tuition, room and board.

I paid the entire remaining amount within six months. But even though the debt was paid off quickly, it still showed up on my credit report.

A few years later, I had a good overall credit score. But I was saving up to buy a home and wanted my score to be as high as possible so I could qualify for a good mortgage rate. The tuition bill was the only negative item.

Then someone suggested that I try a goodwill letter.

What is a goodwill letter?

A goodwill letter is one way to remove accurate, negative line items from your credit report. The creditor reporting the negative line item can remove it. So your goal is to write a letter to your believer persuading them to do just that.

Removing a negative line item from your credit report will likely increase your credit score. A higher credit score can improve your chances of getting approved for a loan, credit card, mortgage, or even certain employment positions.

It is important to note that if you find a bug in your credit report, you should not write a goodwill letter. Inaccurate information can be disputed and then removed, which is a completely different process.

How to Write a Successful Goodwill Letter

In most cases, goodwill letters are unsuccessful.

Was mine.

Here are the steps I took to craft a successful letter.

Be precise.

Your believer probably only knows you as a number. The first thing you should address in your letter is the specifics of your situation. Make sure you include:

  • Your account number
  • Total amount of debt
  • When the debt was due
  • The date on which you paid the debt in full

In my situation, I knew the payout of $ 10,000 in six months was impressive given my income, and I emphasized this aspect of the repayment. If you have similar circumstances, be sure to mark them.

Explain your situation.

Goodwill letters are most successful when you’ve gone through an exceptional circumstance and explained it. If your excuse is “I knew I couldn’t afford to get the most out of my credit card, but I really just wanted the new iPhone.” You are unlikely to be successful.

Exceptional circumstances include divorce, job loss, natural disasters, domestic violence or economic abuse, or unexpected medical emergencies.

In my situation, I explained why there was confusion about who would pay the bill and reiterated that once it became clear it was my responsibility, I paid it off quickly.

I expressly regret it.

At this point in your goodwill letter, you want to regret your late payments. They intended to pay on time – before this exceptional circumstance emerged.

Otherwise, if you have a positive payment history with the company, you can address that here as well. Anything you can do to demonstrate financial responsibility will help.

Explain why the item should be removed.

Next, provide a reason why you should remove this line item. For example, you might need to buy a car to get to work. However, the negative line item on your report will not allow you to secure a vehicle listing at a reasonable APR.

By setting this out for your believer, you will let them see how their help can change your life in tangible ways.

You can wrap your letter by saying something like: “I hope you will consider removing this collection from my credit report as a gesture of goodwill.” and thank you for your consideration.

Provide supporting documentation.

If you have any documents supporting the claims in your letters, include them. For example, if you’ve experienced a natural disaster, any documentation you can provide from FEMA or your insurance company can come in handy.

You will also want to include a brief record of your payments, including receipts or bank statements issued by the creditor.

In my case, I’ve included a receipt for all payments and a printout of my financial records straight from the school’s website.

How do I know if I am successful?

I knew my school removed the late payment from my credit report because they sent me a letter telling me they had. Your creditor may or may not notify you in the same way.

I followed up on doing my annual credit check for the next year. Sure enough, the late payment has been removed from my report.

During the pandemic, you can check your credit report weekly for free so you don’t have to wait a full year to check. The item may even be removed before your believer contacts it.

What if my goodwill letter is rejected?

Your creditor is under no obligation to remove accurate, negative line items from your credit report. You ask them to do it from the goodness of their heart. Even after carefully writing my letter and doing a good case, I was lucky in the end. Most letters of goodwill are rejected.

If your goodwill letter isn’t working, all you have to do is deal with the negative line item until it falls off your credit report. This usually happens after no more than seven years.

But if you take the time to write a compelling, one-page letter, you can try to change your financial life years ahead of schedule. Give it a try!

Brynne Conroy is a contributor to The Penny Hoarder.


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