It was good, but I wanted it to be excellent.
Earlier this year, I noticed that a late payment had dragged my credit score down to the low 700s: above average for my age, but below the top range that creditors — especially mortgage lenders — reward with the best interest rates and terms.
Repairing a damaged credit score can take a while. As I quickly learned, my late payment would stay on my credit report for seven years, weighing down my score the whole time. It can also be costly. Credit repair companies take advantage of the somewhat opaque process to charge unnecessary fees for spotting and disputing negative items on your credit report.
But I was able to make two moves, each of them free and together requiring about one hour of work, that boosted my credit score by 84 points in one month — and by over 100 points in total over the course of 2021.
Here’s how I did it, and how you might be able to do it, too — including a template letter you can adapt that helped me erase my late payment from my credit report.
1. I Wrote a ‘Goodwill Letter’
Missed or late payments are a surefire way to bring down your credit, since payment history is the most influential factor on your score. It accounts for 35% of your FICO score, the scoring method most commonly used by lenders.
In April, after opening a new line of credit to pay for some dental work, I discovered that I had missed a payment due in January — making it late by several months. Daunted by the prospect of paying the price for seven years (the amount of time a reported delinquency like a late payment remains on your report), I looked for ways to reverse the error more quickly.
I wrote what’s called a goodwill letter, basically a polite way to ask your lender to change the way it reports certain behavior to the three credit bureaus in charge of compiling credit reports. Your lender is by no means obligated to agree to this request, and in fact banks are required by law to report accurate information to credit reporting agencies. Some, including Chase and Bank of America, state on their websites they will not make goodwill adjustments for late payments.
But anecdotal evidence suggests at least some creditors are willing to adjust for late payments. If you can demonstrate that you’ve been a responsible customer in the past and provide a credible explanation, it’s worth a shot. The worst they can do is say no.
I wrote a goodwill letter in about 30 minutes after reading stories online from others who had found success. In it, I explained how my late payment had been the result of opening a card with a new bank and failing to keep track of how to make payments on the account.
On April 30, I logged into my account on the bank’s website and sent this:
[My Account Number]
Thank you for taking the time to read this letter. I’m grateful to be your customer.
I’m writing because I noticed that my most recent credit report contains a late payment reported in January 2021 for my [name of bank] financing loan.
I want you to know that I understand my financial obligations, and I take my commitments seriously. Apart from this one late payment, I have an excellent repayment record for all of my debts.
The reason I made a late payment is that I did not receive my [name of bank] card in the mail. I recently moved to a new home, and the card was sent to my old address. I had mail forwarding in place, but somehow the letter did not reach me. As such, I did not have my account number and was not able to set up an account online. Therefore, I missed my reminder to pay my January 2021 payment.
As soon as I realized this error, I contacted [Bank] via phone on April 20 to explain the situation and to order a replacement [Bank] card. (Confirmation number of my request: #123456789). My replacement card arrived in the mail on April 28, and I immediately activated my online account and enabled auto-pay so that I will never miss a payment again.
I’m planning to apply for a mortgage soon, and it’s come to my attention that the missed payment on my record will hurt my ability to qualify. I truly believe that this one late payment does not reflect my creditworthiness and commitment to repaying my debts.
It would help me immensely if you could give me a second chance and make a goodwill adjustment to remove the late payment for January 2021 from my credit report.
Thank you for your consideration. I hope you’ll approve my request.
Three weeks later, on May 21, I got an email alert that there was a new communication waiting for me in my account inbox. Bingo. It read:
Dear [My Name],
Thank you for contacting us regarding your [Bank name] account.
We have submitted a request to the major credit bureaus to delete any delinquency that occurred from 12/18/2020 to 01/19/2021. Please note that it may take up to 60 days for the credit bureaus to update their records.
We value your business. Our experienced team of Customer Care Specialists are ready to help if you need further assistance.
Between April and May, my credit score jumped 84 points, from 724 to 808.
2. I Requested a Credit Line Increase
I don’t know exactly how much of that 84-point rise was due to my goodwill letter. Because in the same month, I made another free and fast move to improve my credit.
This time, I focused on the next biggest factor that goes into credit score weightings: credit utilization ratio. It’s a way of comparing the amount of money you owe compared to the total amount of credit you have access to. For example, if you have $1,000 of credit card debt, and your total credit line is ,000, you have a credit utilization ratio of 10%. The lower your ratio, the better. It accounts for 30% of your FICO score.
Apart from the new credit card I opened and promptly missed a payment on, I typically use just one card: a simple cash back card with no annual fee. It serves my needs well, so in the seven years I’ve had it, I haven’t thought about it much beyond paying off my balance in full every month.
But as I picked apart my credit score and the factors that go into it, I realized that I could improve my utilization ratio by increasing the credit limit on my card.
To increase your line of credit, all you have to do is ask. My bank has a feature on its website where you can request a credit line increase online. I pulled it up, input some information including my employment status, my estimated yearly income, and the amount of my requested increase.
I hit submit, expecting it would begin some sort of review process. But I was wrong. On the next screen, I was notified that my credit line had instantly more than doubled.
If you have a good history of paying your credit card bills, know you’ll use the credit line extension responsibly, and are earning more money than you were the last time your credit limit was assessed, you might be able to increase your credit limit too.
Some issuers automatically grant credit line increases after a certain time period or regularly check if you’re eligible for one. Read your card agreement and terms for more information.
A few months later, with my credit score comfortably in the low 800s, I decided to push my luck and ask for another credit line increase. Again, it was instant: in about 15 minutes, I increased my credit line again, this time by another 50%.
By November, my score had hit a new high: 824. Now, it was excellent.
Credit scores don’t matter until suddenly they do — like when you want to buy a home, take out a loan, or apply for a credit card.
I was able to significantly raise my score in just a month, but that was mostly thanks to my long track record of paying my bills on time. In truth, building a great credit score is about making responsible financial moves over a long period of time.
Start as soon as you can. It’s up to you to check and monitor your credit, fix any errors you may find, and learn about the factors that go into your credit score so that you can take steps now to raise it.
As for me, I’ll check my credit report every few months and keep an eye on my credit utilization ratio, especially if my financial situation changes. But I won’t be writing any more goodwill letters — because I don’t plan on missing any more payments.