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Advice on Goodwill Letter for Settled Cards


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Hi All,

 

 

I'm trying to understand the best approach on good will letters for two cards that I settled a few years ago and finished paying in 2020.

 

I had a Bank of America card and Amex which were both charged off after working with a debt settlement company. I was then sued by both cards and BoA garnished my bank account.

 

After hiring a lawyer, the accounts got settled and I finished paying last year. However, the law firm I hired didn’t secure any guarantee to remove the cards from my credit report after payment.

 

I'm starting to look for car leases through Honda and want to improve my scores to get the best rate/amount before I apply so I’m trying to figure out how to handle those two accounts in particular.

 

My FICO scores are currently - Ex: 646; Eq: 657; TU: 617.

 

The issues are:

* Serious delinquency

* Few accounts paid on time

* No loan activity

* Bad payment history

 

I've done a few things to start counteracting the effects, including:

* Opening a credit card account with Amex (1k limit) in November of last year, not using it too much and paying it in full each month.

* Opening a Capital One card (2k limit) in April, using it more frequently for every day purchases and paying full balances every few weeks.

* Opening a credit builder loan this month to establish a consistent payment history.

* Asking  my girlfriend who has excellent credit and a long credit history to put me on as a registered user.

 

I think these are good steps to take, but the obvious big issue is the serious delinquency, so I'm trying to get the credit cards removed from my CR. 

 

I've disputed the cards to try to have them removed from all three CRAs and they both came back as verified, so that didn’t work.

 

My next step is going to be a good will letter to both creditors.

 

I'm mainly planning on highlighting the circumstances (divorce, undisciplined spending, etc) that caused me to default. 

 

I then want to highlight with Amex that I have a new card with them and have been very responsible over the course of the last few months. For both cards, I want to highlight all of the progress I've made in my financial life, learning to budget and to be disciplined about financial management, my changed views on credit, etc. 

 

My hope is that they will remove the accounts from my CR and that will highlight my positive payment history on past loans, etc. 

 

 

My main question for the group is, do you see any issues with my approach (mainly with regards to the goodwill letter, but generally is also welcome)? 

 

Should I try to remove individual payments instead of trying to remove the entire cards?

 

I did have a positive payment history with each card at some point, so I feel this could be a more useful approach, but it seems a lot more work for whoever reads the letter vs just deleting the account completely. 

 

Any other advice on what to include? Would it be crazy to include budgets, net worth statements, etc to prove that I’m on the up and up?

 

Thanks in advance!

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Goodwill letters are occasionally effective on a single 30-day late, and generally it helps when your account is still open and it's been managed well since the brief dip into negative territory. 

 

If these two creditors have sued you, there's no way they're doing a goodwill adjustment to how these are reporting.

 

With that said, how do you know that you won't be approved for the Honda lease?  

 

PS: It's a really awful time to buy a car. ;)

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Just to chime in with @cv91915, when "goodwill letters" are effective, it's precisely because of what the name suggests ... you've established a goodwill repayment reputation with the lender.  It's on that basis that a lender may consider removal of modest delinquency blemishes from your tradeline. 

 

You have little, if any, goodwill with these firms based upon your account history.  I grasp specific adverse circumstances likely came to bear on your ability to repay these accounts.  But, bottom line, BA and Amex likely had to persist with some fairly heavy handed collection methods in order to ensure repayment.  They aren't going to "reward" such repayment conditions.

 

If you think you may have a brighter prognosis for "goodwill", it really can't hurt to try.  Keep your expectations low.  But, truthfully, you have no prospect for a positive outcome along this avenue.

 

As far as managing your score, it sounds like you're off in the right foot.  Start to build a portfolio of cards that serve your credit needs well and are likely to see active use.  Keep your credit nose clean and keep all payments timely.  And let time deal with the adverse entries to your credit report that you can't otherwise clear.

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