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- The author was unaware she was carrying educational debt when it was reported to credit bureaus. Although she paid the debt off quickly, it still left a negative mark on her credit report.
- She wrote a goodwill letter to the school and successfully got the negative line item removed.
- After paying off the debt and getting the negative mark removed from her report, her credit score grew by about 40 points.
- Good documentation, an otherwise healthy credit report, and adverse life circumstances are all factors that will increase your chances of writing a successful goodwill letter.
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Thirteen years ago, my flip phone rang.
I flicked it open, only to panic when I discovered there was a collection agency on the other end of the line. They were calling about a debt I owed to my previous university.
I attended one semester of school the traditional way. My financial backing fell through part way through the semester. I didn’t find out the money wasn’t there until I went to schedule my spring classes. The guidance counselor told me I couldn’t because of nonpayment.
Being young and naive, even in that moment I didn’t realize the financial responsibility fell on me. I thought the legal obligation for the semester rested with the person who had originally pledged tuition.
In the subsequent year, I got married, changed my name, and moved three states away. Apparently all of those changes made it difficult for the school to get in touch with me regarding the debt. So they passed it off to a collection agency.
After that phone call, I paid off nearly $10,000 over the course of six months. But years later, as I was examining my credit report, I realized the incident had still left a negative mark on my credit history.
Enter the goodwill letter
Because I worked in personal finance, I had heard of this thing called a goodwill letter, and decided to give it a shot. Essentially, you write a letter to your creditor, explaining the circumstances around the negative line item. You ask them to remove it from your credit report out of the goodness of their hearts.
These letters are not often successful. But mine was. Here are some reasons why.
You must have a legitimate reason
I did not know about my debt. The school had records indicating it could not reach me when they had tried to contact me, so there was documentation supporting this fact. While my youthful ignorance about tuition billing would likely not have served as enough of an excuse on its own, the school’s inability to contact me helped my case.
Typically, to write a successful goodwill letter, you must have experienced adverse life circumstances that were out of your control. Think living through a natural disaster or fleeing domestic violence. Hitting a rough patch with your cash flow usually isn’t enough in and of itself.
I was fortunate that my school was a rational and kind creditor, more interested in being fair than punitive. This is not the experience of most who write goodwill letters.
A decent credit history helps
At the time I wrote my goodwill letter, I was living below the poverty line. But I was also never late on my bills. The college incident was the only negative line item on my credit report at that time.
It also ended up being important that when I learned about the debt, I paid it off quickly. Ten grand in six months is a lot for anyone, nonetheless a young adult without a college degree. I highlighted this in my goodwill letter, making it obvious to the school that my nonpayment had not been out of a lack of responsibility.
Ultimately, after paying off the debt and getting the negative item removed from my report, my credit score increased by about 40 points to about 760.
Documentation is key
Most importantly, I had documentation to back all this up. I had asked the collection agency to send me a fully itemized record of my payments and correspondence, which I submitted to the school with my goodwill letter.
It’s very unlikely you’ll find yourself in the same situation as I did. But if you experience life circumstances that negatively impact your credit — especially circumstances more significant than my own — writing a goodwill letter doesn’t hurt.
Getting a negative line item removed from your credit report can drastically improve your credit score. This is particularly important right before you take out a mortgage, car loan, or other interest-bearing debt as the offered APR is likely to hinge on your credit score. Documentation and a good-faith effort to right the ‘”wrong” will boost your odds.
Even if they say no, it doesn’t hurt to try. The only thing you have to lose is the cost of postage.