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Late payments on any type of debt can hurt your credit. Payment history represents 35% of your total credit score, and a late or missed payment on your student loans could cause your score to drop.
But sometimes mistakes do happen. If you’ve missed a payment, you might have recourse with a goodwill letter for a student loan. Here’s how these letters work and why you might want to write one.
What is a letter of goodwill?
A goodwill letter is a notice you write to your lender about a late payment that has been reported to the credit bureaus and appears on your credit report. You can write these letters for any loan or line of credit, including a mortgage, car loan, or student loan.
The purpose of the letter is to ask the lender to remove the overdue payment from your credit report as an act of goodwill. If the negative rating is removed from your report, your credit should rebound as if the payment had never been missed at all.
Are Student Loan Goodwill Letters Successful?
There are no hard statistics on the success rate of these letters, and some lenders may be more receptive to them than others. But there is nothing wrong with making this request.
It’s a good idea to contact your lender as soon as you see late fees on your account or a drop in your credit score. The earlier you contact, the more understanding and proactive your lender will be.
The potential success of the letter will depend on several factors, including the rules set by your lender, your payment history, and who is reading your letter.
How to Write a Compelling Goodwill Letter for Student Loans
If you noticed a negative rating on your credit report, immediately contact your lender to request the deletion. If they ask for the request in writing, here’s what to include.
- Some personal information. Include your name, account number, and any other identifying information about your account. Some lenders may need your phone number, address, or other corresponding information to confirm your identity. Along with that, find out where you should send your letter. If you’ve called your lender, ask for the representative’s name so you can personally address your letter.
- Details of late payments. Talk about when the late payment happened and, if possible, include any documentation that shows the late payment happened when you say it did.
- Reason for late payment. Discuss why this oversight happened in the first place. For example, have you missed a payment due to job loss? Were you in the hospital or did you have an emergency that prevented you from meeting your payments? Depending on your lender, you may need to show proof of your claim before the claim is accepted.
- Delete deletion request. Specifically request the removal of the late payment from your credit report. You may want to include how the ding hurt your credit score and why you want to keep your score as high as possible. For example, if you are about to apply for a mortgage or car loan, you must have excellent credit to qualify for the lowest interest rate available.
- Show you’ve made payments. Providing a detailed history of your payments on time will help show you have the capacity to repay your student loans. The more you can prove how responsible you are for the credit, the more likely it is that your application will be approved.
- Justificative documents. If you’ve had a medical alert that caused you to miss a payment, you may want to include all of your hospital stay documents. It’s not always mandatory, but it can help you save time in the long run by including it so the lender doesn’t come back with this request.
You’re asking your lender to do you a favor, so make sure your request is polite and respectful. Avoid rude, threatening, evil, or demanding language in your letter.
Sample goodwill letter for a student loan
Account number: 123456789
Phone number: (555) 123-4567
1 main street
Anytown, CA 12345
I appreciate your time and consideration in reading my letter. I am writing to you today to request the removal of a late payment reported on April 28, 2021.
Over the past five years, I have had an impeccable track record of making student loan payments on time. Unfortunately, a family loss earlier this year caused me to fall behind on payments. Although I have since made the overdue payment, the late charges still show up on my credit report.
Since my credit report influences future credit opportunities, like buying a house or a car, I’m afraid this little hiccup illustrates a different picture of my otherwise strong credit report. Is it possible to have this late payment mark removed from my credit report?
I have attached a copy of my payment history for the past five years along with details of the family loss for your records. Please let me know what you need from me to expedite this request.
Sending your letter of goodwill for your student loan
The fastest and easiest way to send your letter is by email, but that shouldn’t be the end.
Send your letter to a specific person if possible, whether it’s the customer service representative you spoke to on the phone or someone else they advise you to send it to. Your representative might tell you that’s enough, but they might also ask you to go further by sending a hard copy.
While it can be a bit more inconvenient, the extra time and effort is minimal compared to what you would save by removing the bad rating from your credit report.
What to expect after sending your late payment waiver letter
Whether you send your letter by email or post, don’t expect a quick turnaround time. You may not receive a response from your lender for at least two to three weeks. If you haven’t heard anything by the end of three weeks, contact your lender to make sure your letter has been received and ask for a timeline for a response.
Keep in mind that lenders are not required to approve your application, but staying on top of them can help your case.
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