Unlike a pay for delete letter, in which the request to delete a derogatory account is based on a payment of an outstanding balance to the creditor, the goodwill deletion requests the removal of the account based on the goodwill of the creditor.  Since the request is based on goodwill, these requests have a low success rate but, they do have a rate of success that makes it a tactic worth pursuing.

For the most part, goodwill letters are more successful when the individual making the request doesn’t have an abundance of delinquent accounts or accounts that have been sent to collections.  Consumers that have late payments are delinquent accounts in their credit report due to unusual circumstances or hardship but have an overall record that is pretty good, can be good candidate for this credit repair technique.

If you think your situation looks good for trying this approach, you will want to write a goodwill letter that has a human touch and draws out the sympathy of the recipient.  You will generally have greater success if you tell a story that doesn’t sound like it is a form letter.  We have included a sample goodwill deletion letter to help you get started.

Sample Goodwill Letter.

Your Name
Address
Creditor’s Name
Address
The Account Number
Date

I am writing to see whether (bank name or company name here) would consider making a goodwill adjustment my credit record and credit report regarding my late payments on the (type of loan or account here) your firm extended to me in (date of account here). 

Unfortunately, that account had some payments that I made due to some unusual problems in my life.  I tried my best to make timely payments but (describe incident here) and began experiencing financial hardship.  My hardship made it very difficult to keep up with my obligation but under the circumstances I did the best I could. 

I would be very grateful if you would reevaluate my payment history and remove the late records from the account listing on your credit report

Thank you in advance for your time looking into this matter.

Sincerely,

Your Signature

This is just an example of a goodwill deletion letter that should be revised to make it personal to your situation and request.  You can also add information to the deletion letter such as your past good payment history and how long you have had an account with the company.

Finding a good contact person or department with the creditor to the send the deletion request to can be challenging at times, start with customer service department.  This problem can also be used to your advantage.  Be persistent with your request and send it to more than one person or address with the company.

Using a goodwill letter can be a valuable tool to request a creditor or even a collection agency remove negative listings purely out of goodwill which will in turn improve your credit history and credit score.

A public record is identified in as separate section of your credit report identified as simply Public Records. This section of your credit report identifies derogatory credit items that are a matter of public record through court filings and county records.  Common public records include bankruptcy filing information, tax liens and judgments.

Bankruptcy information entails the date and type of bankruptcy a consumer filed for as well as the disposition of the bankruptcy.  Tax liens that are reported on credit report can include any state, local or federal tax liens but generally involves state and federal unpaid income taxes that have become past due and the municipality has subsequently issued a lien against the tax payer’s property.  A judgment is the action resulting from an unfavorable court verdict against a consumer, ordering them to pay an outstanding debt.  Judgments on credit cards and other debts along with bankruptcy filings, tax liens and other records will be especially damaging to your credit score.

Many consumers are aware of the impact that bankruptcy can have on their credit profile and credit score, but many consumers are not aware that other public records and judgments can have a similar long lasting impact and adversely affect their credit score and credit report.  According to the credit score companies, credit score model research has found that a bankruptcy filing, a judgment, or any other public record is a good barometer for assessing future creditworthiness of an individual.

Judgments, bankruptcies and public records are strong indications of an unstable borrower and are a clear credit risk for lenders and potential creditors. Since these items are considered strong indicators of credit risk, the credit scoring models give a significant amount of weight to these items.  Unfortunately that weight leads to a much lower credit score.

Some public records can remain on your credit report for up to 10 years and therefore are some of the most damaging credit events in your credit report.  Fortunately, as with most all bad credit items in your credit report, adverse public records will have less impact on your credit score over time.

Needless to say, while the judgments, bankruptcies and public records are recorded in your credit report they can have a unfavorable effect on your chances of getting a new loan, new mortgage, rental unit or possibly even a new job.  This is why it is importance to check your credit report regularly to look for adverse credit situation that may get worse as well as any potential credit reporting errors.

If you do find a lien, judgment or other public record on your credit report that may be incorrect, you can dispute the credit report to have the information removed.  Any inaccurate or questionable negative information can legally be disputed and deleted from your credit report and this includes public records.  The Fair Credit Reporting Act gives consumers the right to challenge any negative information in their credit report including any judgments, liens, bankruptcy information or other public records.

The Fair Credit Reporting Act (FCRA) is the law that covers credit report access based on loan and credit denials. The law allows the consumer that is denied credit to get a free credit report if their credit application is denied. The applicant who has been denied credit can receive a free credit report from the credit reporting agency that was used by the lender or creditor that denied the credit request.

The lender or creditor that denied the credit request should provide information on how to request the free credit report from one of the three national credit reporting companies. With information from the lender that denied your credit request, you have up to 30 days to request a free copy of your report from the credit reporting agency.

Many consumers, unfortunately, fail to exercise their right to get a free credit report when they are denied for a loan. While the notice of loan denial can be emotionally troubling, they are a number of reasons why you should use the loan denial to get your free credit report. First and foremost, your credit report has become one of the most important financial tools you have as a consumer. You should maintain the integrity of the data in your credit report to ensure it is accurate and use it to maintain a good credit score.

Your free credit report will list all of your accounts that report to that credit reporting agency with any late payments and missed payments that may be impairing your chances of being approved for credit. Some of the derogatory accounts or late payments may very well be an error.

Credit report errors may very well start with cases of mistaken identity due to input errors, out of date credit information that is being reported past the statue of limitations, and blatant errors that can easily occur and in fact due happen to millions of individuals frequently. Errors that include the amount, dates and account number of the past due and delinquent accounts.

It is your right to dispute this information and have the credit reporting agency validate the information or correct the data or better yet, have the data removed with a well presented credit dispute letter.

Make sure to take advantage of the opportunity to read your credit report when you have been denied for a loan. This is one of the first steps to improving your credit and improving your credit score which will help you gain a firm control of your financial position.

Consumers can also receive a free credit report from each of the three major credit reporting agencies once a year. The Fair and Accurate Credit Transactions Act or FACT Act cover the regulation that allows consumers to get a free report once every twelve months from each of the national credit reporting companies.

There are additional conditions under which a consumer can get a free credit report. The FCRA also entitles consumers the ability to get a free credit report if they are unemployed and seeking employment, receiving welfare assistance or if they are a victim of fraud or believe they may be a victim of fraud.

The error that is to be covered in the credit dispute letter can be small or large, the account balance, payment history or date last paid.  As long as you believe the data is inaccurate, have the credit reporting agency investigate the account in question.  After all, even if it is a small error, the credit reporting agency may have to remove the whole account from your credit report.

Under the Fair Credit and Reporting Act (FCRA), the credit reporting company is responsible for correcting inaccurate or incomplete information in your report.  You have the legal right to work out your credit disputes with the credit agencies yourself.  To take advantage of all your rights under this law, contact the credit reporting agency with the credit dispute letter to have the information corrected or (preferably) removed.

When you dispute a questionable negative credit item with the credit bureaus, you are demanding that they perform an investigation to determine whether or not the item should be listed on your credit reports.  If the credit bureau cannot verify the accuracy of the item, then they are required to correct the listing or completely delete it from your credit report

It is generally best to write one letter at a time and wait for the reply.  This way you can easily keep tabs on the timing and response from the credit reportage agency.   By isolating one problem area at a time upon you want use the FCRA to get the credit reporting agency to delete the questionable negative information from your credit reports.

After the credit reporting agency completes an investigation, they must give you the results in writing and provide a free copy of your report if the dispute results in a change to your credit report.

Follow this example to write your own letter of dispute.

Date
Your Name
Your Address, City, State, Zip Code

Complaint Department
Credit Reporting Agency Name
Address
City, State, Zip Code

Dear Sir or Madam:

I am writing to dispute information on my credit report.  I have received a copy of my credit report and find the following items to be in error.  I am writing to dispute the following information in my file.  I have circled the items I dispute on the attached copy of the report I received.

(Here you want to list the item(s) that you feel are inaccurate in your credit report including the type of accounts, names of the creditor, and the account numbers.  Include what changes you feel should be made.)

I am requesting that the disputed item be removed (or updated) from all current and future credit reports.

Enclosed are copies of (payment records, credit report, letters from the creditor, court documents, or related supporting documents) supporting my dispute regarding this account.

I demand these items be deleted from all current and future credit reports.

Pursuant to Section 611(d) of The Fair Credit and Reporting Act, please send notification that these items have been deleted.  Please send an updated credit report to my address that is listed above.

Thank you for investigating this matter.

Sincerely,

Your Signature
Your Full Name
Date of Birth
Social Security Number

It’s estimated that well over 25% of credit reports contain information that is wrong.  However, some of the information will not be impacting your credit score.  So the first step is to obtain a new credit report and find the problems that are pulling your credit score lower.

In order to find discrepancies in your credit report you will need to know what information should be in your credit report.  A credit report will contain your personal identifying information including your full name, social security number, birth date, previous addresses, and, possibly, your previous employers.  The report will then cover your credit accounts and history with items such as mortgage loans, car loans, credit cards and collection accounts. 

Following this data is any public records such as bankruptcy filings, liens or judgments.  A list of credit inquiries that covers any individual, business, or agency that has requested to see your credit report usually concludes the report basics.

Checking personal information is important but fixing those errors should have little to no impact on your credit score.  Finding errors in your credit history may be a little more difficult but this data is the primary driver of your credit score and by repairing or removing these items you will see the biggest improvement in your credit score.

Errors that should be reviewed and subsequently disputed with the credit reporting agency include:  all credit accounts listed that do not belong to you or are otherwise incorrect in their reporting, closed lines of credit that do not appear as closed, all balances should be accurate which includes the recording of current payments and balances, negative listings that are past the statue of limitations.

Inspecting your credit report for problem areas and errors is the first step to improving your credit and credit score.  By investigating and disputing questionable negative items on your report, or working with creditors, you may be able to improve your credit score significantly.

There are certain guidelines you should keep in mind when approaching a debts settlement situation and writing a debt settlement letter. Just because you are agreeing to make a debt settlement doesn’t mean you can’t start off the negotiation with a very low figure. The creditor or collection agency can simply refuse the offer and will generally make a counter offer.

Without accepting responsibility, the debt settlement letter should clearly state that you intend to pay the debt but this does not interfere with your position regarding a lower settlement figure and that the data is deleted from your credit report.

Clearly request that the credit records be cleared of the collection account in turn for sending the money in a timely fashion. It may help to agree to send the debt settlement funds as a cashier’s check via certified mail if the creditor or collection agency agrees to remove the records from your credit report.

Once the settlement terms are worked out the creditor or collection agency, make sure to get a debt settlement letter sent stating the terms and conditions of the settlement.

The following is a debt settlement letter sample:

Your name
Address
City, State and Zip
Phone Number

Collection Agency or Creditor’s Name
Address
City, State and Zip

RE: Account number or Reference Number:
Date:

Dear Mr./Ms. (Contact Person for Collection Account)

I am writing this letter to show my intention to settle a past due debt with (Collection Agency or Creditor Name Here).

I do not agree with the amount owed but I am willing to make an effort to save time and expense by offering to settle the account for $ (Debt Settlement Amount Here).

This settlement amount will cover the current outstanding debt and any future charges. As part of this settlement, I am making the following requests:

After the payment is received the creditor will delete the account off of my credit report from all three major credit reporting agencies or show on credit report account paid in full. In addition, any litigation is to be dropped.

If you accept this offer, please return a written confirmation to my address listed above. Upon receiving your confirmation, I will send a cashier’s check in the amount of (Settlement Amount) paid to (Creditor’s Name) within 3 business days.

Sincerely,

Your Name and Signature.

A number of credit reporting agencies act as resellers of credit data that is mainly derived from the big three credit reporting agencies of Equifax, Experian, and TransUnion. While the big three credit reporting agencies control the majority of raw consumer credit data in the U.S. a number of smaller credit reporting agencies resell the data by preparing their own credit report into a merged file for companies that are authorized to access the reports. This is a common practice within the mortgage industry. In some situations, these credit resellers are not taking the necessary precautions regarding security and access to the data.

In a recent case, the FTC brought charges against three companies that were in the business of providing consume credit reports to the mortgage industry. These companies were resellers of data which means they buy credit reports from the three major credit reporting agencies and resell reports to mortgage companies. Unfortunately, the data was not adequately protected.

The complaint against the credit reporting agencies or the resellers in this case, centered on the fact that they did not take reasonable steps to protect consumers’ personal information in their databases and credit report files. As a result of these failures computer hackers were allowed access the consumer credit report data. The FTC reported that hackers had gained unauthorized access to approximately 1,800 consumer credit reports.

As part of the Federal Trade Commission’s ongoing campaign to protect consumers’ personal information, three companies whose business is reselling consumers’ credit reports have agreed to settle FTC charges that they did not take reasonable steps to protect consumers’ personal information, failures that allowed computer hackers to access that data. Based on the FTC report summary, the failure to provide safeguards violated several federal laws including the Fair Credit Reporting Act.

Credit and collection news about such violations drives home the importance of consumer protection regarding credit data and identity information. Consumers need to be cautious with their own personal data security. Consumer need to check their credit reports periodically. When an individual receives their free credit report, they need to review it carefully.

A credit report review needs to cover any inquiries from companies the consumer has not contacted, accounts they didn’t open or any debts and accounts that are unusual. In addition, consumers should review their credit report to verify their identifying information including the social security number, address and name. Make sure to have any inaccurate information removed to stay secure and improve your credit report and score.

It certainly does sound like a complicated mess of information. Thankfully it appears more complicated than it really is. Consumers need a little advance knowledge to be aware of their credit score and credit report options before they buy a credit score to avoid buying a score that has little value.

Regardless of the type of credit score a consumer acquires, there will be multiple credit score outcomes. An individual will receive one credit score from each credit bureau or credit report. This is because the credit score is based on the information in the credit report and the data in each credit report may be different.

Though there are several small credit reporting agencies in the U.S. most consumer credit reports are generate based on the big three credit reporting agencies: TransUnion, Experian and Equifax.

Not only will there be a separate credit score based on the information found in the different credit reports but there are more than one credit score models used in the lending and banking industry. For consumers that are completely unaware of the credit score and credit report business the type of score or more specifically, the name of the credit report and credit score used is dependent on the bank or lender requesting the report and/or credit score. For big ticket loans such as a mortgage, the lender will review all three major credit reports and will also examine the three credit scores that will be available from these reports. For smaller loans, the lender or bank may only review one credit report and one credit score.

A consumer can buy different credit scores that use different credit score models. There is no single credit score company. However, most banks and lenders utilize the FICO score to make lending decisions. Therefore, as difficult as it is to endorse one type of credit score, if you are going to buy a credit score it makes sense to buy the score that is currently the most widely used credit score by creditors, the FICO score.

As many consumers are aware, you can retrieve a copy of your credit report for free once a year from each of the three major credit reporting agencies. A free credit report is available through the site annualcreditreport.com. This service is entirely without obligation. Unfortunately, although the three major credit reporting agencies are obligated to support this site and provide each individual with copy of their report, the companies are not required to supply credit scores. The only way to get a true credit score such as the FICO score is to pay for it. There are companies that provide estimates online, but they are only estimates.

Consumers that contact the FICO score model company, Fair Isaac Corporation, can purchase a copy of their credit score as single purchase or as part of a plan to monitor their credit report with monthly updates. Through the FICO score website, a consumer can buy a FICO scores from their choice of Equifax or TransUnion, which means the credit score will based on the data found in either one of those credit reports. The company marketing material explains that the consumer that buys a credit score will receive a full explanation of the credit score and how lenders view the score.

FICO credit scores are by far the most widely used scores, especially in the mortgage industry. The bottom line, if you’re going to buy a credit score, buy the FICO score. Just remember that the score is based on the data in the credit report and you can obtain a copy of your credit report for free.

If you are late on paying on an account and have not contacted the creditor to work things out, it will eventually get turned over to a collection agency. If the account remains unpaid – even if there is a dispute over the debt – it will be flagged as a charge off after about six months of non-payment. While this is not the same as having foreclosure or a bankruptcy on your record, this puts you in the same “club”. This is something to be avoided at all costs.

A charge off is a title given by the creditor or lender to identify a debt that the lender has determined to be uncollectable. It is called a charge off because corporations see it as a bad debt and charge it off as a business expense for tax purposes. While they might write it off it is still legally collectable and the collection agency will still pursue you. If the debt is a considerable amount, say $2,000 or more it is possible that the company will file a lawsuit to collect.

Even after the original creditor, bank or lender charges the account off, this in no way means they will not continue to pursue collecting the amount owed. These collection efforts can lead to a collection agency handling the account or a law firm which will try to collect the delinquent debt through the courts. The collection efforts may start immediately or it may be sometime before you hear from a collection agency or attorney. If the charged off account is pursued through the judicial system, the debtor may very well end up with a judgment entered against them for defaulting on the original debt. The judgment will be another derogatory entry on the individual’s credit report and do more harm to the credit score.

Even if You Pay it Off
The reason to avoid having a debt go to this status is that even if you pay off the debt the charge off will remain on your credit report for seven years. Still, it is better to have a paid charge off than an unpaid one.

So if it happens to you, take action. If the charge off is legitimate – you owe the debt and have not paid – work with the creditor directly to broker a deal. Be sure to get everything in writing. The collection agency will not cut you as good of deal – work around them. If you work directly with the creditor you may be able to get the charge off removed from your credit report by making a partial or full payment. Always try to negotiate a settlement and obtain a pay for delete letter before paying the past due debt. Read How Long Does Negative Information Stay On Your Report?

When a consumer has a judgment recorded in their credit report, it is normally found under public records section of the report. The outcome of most all court proceedings are a matter of public record. For this reason, judgments, bankruptcies, foreclosures and tax liens are generally part of an individual credit report. More importantly, public records are often the most damaging component of a credit score. Delinquent credit and collection accounts will harm a credit score but public record information such as judgments will generally decrease a credit score far more than a delinquent credit card account or collection account.

A court judgment can be obtained by more than one means through the courts. In all cases, the court enters the judgment and therefore the process starts with a complaint being filed against a defendant. For consumer credit cases this would often be a complaint filed against the consumer that owes money on a credit card or bank loan.

Once the court case proceeds, a judgment may be entered at the outcome of the court case with a consent judgment, in which both parties agree, by stipulation, to a particular outcome. A judgment may also be entered as a declaratory judgment, in which the court settles a civil case and declares the rights and obligations of each party in the dispute. And a judgment may be obtained as a default judgment, which is a binding judgment in favor of the plaintiff when the defendant has not responded to a summons to appear in court. A default judgment is one of the most common judgments in regards to disputes involving credit, credit cards and bank loans. These judgments are entered when the defendant fails to acknowledge the notice, fails to appear, or fails to defend the case.

The judgment issued by the court will often be for a specific amount of money. The amount of the judgment will generally also include court costs as well as the amount the plaintiff was requesting for actual losses.

Regardless of the type of judgment, the record is likely to become a part of the individual’s credit report and be calculated in the determination of their credit score. There is no precise way to calculate how much an individual’s credit score will drop because of a judgment.

Once a judgment has been paid by the losing party in a lawsuit, that party is entitled to a formal discharge of the obligation which is referred to as satisfaction of judgment. The satisfaction of judgment does not obligate the credit reporting agency to remove the record from a credit report.

Judgments are problem items in a credit report since they will impact a credit score measurably even if they are paid. Judgments on a credit report not only adversely impact a credit score but most lenders and banks often consider these items to be significant determinants of credit risk will often don’t grant credit to individuals with judgments or increase the interest rate or otherwise make the terms of the credit available less favorable.

Consumers that may have had judgment awarded against them should obtain a copy of their credit report today and start working on either removing the judgment or improving other aspects of their credit report to improve their credit score to present a better risk level to creditors, banks and credit card companies.