Two of the main ways that you can do to improve your current credit rating is to pay your bills right on time and minimize your debt. However, if you are searching for an option that is less conventional, a goodwill letter is a worthy consideration.
Goodwill Letter Defined
A goodwill letter is basically a self-written document sent to a lender after they have reported anything negative to collection agencies or credit bureaus under your name. You can use a goodwill letter in cases where there is an accurate report but the problem in question occurred under certain special circumstances.
For instance, this can be a very simple case such as changed addresses. There are times when people relocate and forget to update their mailing addresses with their lenders. It can lead to unpaid bills or undelivered pieces of mail.
In case you have been involved in an unforeseen accident or you suffered from health issues, it is possible that your financial focus might have shifted to recovery instead. The result of this shift is that you might have been delayed with the rest of your bill payments.
After an overdue bill has been reported, this can have a negative effect on your credit score. It is the time when you should put a goodwill letter to good use, so to speak. It will be addressed to the specific lender that reported your delinquency, clarify the contributing circumstances, and request to remove the negative item from your record.
Tips for Writing a Goodwill Letter
The moment you sit down to write your letter, there are a few things you need to remember:
- Since it was your fault that you have a late payment, a sincere and genuine tone is always a good choice.
- Be responsible for your actions as this can go a long way in life, making for an effective and great goodwill letter.
- Present all the relevant documentation and proof of any errors.
- Show that the late payment you made is actually out of character because you normally take it seriously to make your payments on time.
- Keep your goodwill letter simple and short. Get straight to the point and avoid flowery words and several pages.
What Can You Expect After Sending Letter?
A goodwill letter can be most successful if the rest of your credit history is quite clean. This means you should have well-maintained credit cards and on-time payments. If the problem that resulted to the negative item on the report happens to be out of character, more lenders will be receptive to the goodwill letter compared to seeing a history of credit issues.
If lack of money is the reason why you failed to pay your bill, it is likely for the creditors to be unreceptive. But, if you have an apologetic, genuine, and well-written with the rest of the credit history still excellent, your goodwill letter can definitely go a long way.
Remember that it may take a few attempts before the lender removes the negative line from the credit report.