Subscribe Feed (RSS)Many people want to know if it is possible to remove a charge-off from their credit report. The answer is, it may be difficult, but it can be done.
Let’s talk a bit about what a charge-off is and what happens if you let it go with attempting to correct it. When a creditor feels it will not be able to collect a debt from a borrower, it will very often write the debt off of its books. This normally takes place after many months of late or missed payments. The creditor will likely attempt to communicate with you through letters or phone calls during this time.
It would be wise to contact the creditor at this point and try to work out a solution so the account will not be sent to collections. You should never ignore when the creditor is attempting to contact you because this will look as though you are trying to avoid the debt entirely. If you work with the creditor, you may be able to reach a compromise or arrange for a payment plan to get yourself back on track.
Once the debt is written-off, the creditor may sell the debt to a collection agency who will then own the debt. Collection agencies are known for their collection tactics, which can include harassing phone calls and threats of court action if the account is not paid in full.
A charge-off will appear on your credit report and can remain for up to seven years. This charge-off will severely damage your credit score and will harm your chances of obtaining credit from other lenders. This is why it is important to have charge-offs removed from your credit report.
It will be necessary to obtain a copy of your credit report to start the charge-off removal process. Review your credit report for any inaccurate or false information once you receive it. Inaccurate or false entries can be removed from your credit report by writing the credit reporting bureau and explaining your claim. Be sure to provide the credit reporting agency with copies of any documentation which confirms your claim. The credit reporting agency must verify your claim within 30 days or else it must remove the credit item in its entirety.
Additionally, another option you have is to contact the collection agency and explain that you would like to arrange payment. Debt is normally purchased by collection agencies for cents on the dollar. Because of this, you might want to try to arrange a lump sum payment if you can come up with the money. By doing this, you may be able to negotiate a lower total amount owed. Alternately, you can attempt to arrange a payment plan. Whichever path you decide to take to pay back the debt, be sure to obtain an agreement in writing which states that the charge-off credit entry will be removed in its entirety from your credit report or that the offending entry will be revised to “paid” status.
To summarize, if you find yourself falling behind in your payments, contact your creditor and try to work out an arrangement to avoid a charge-off. If the charge-off account ends up with a collection agency, attempt to negotiate with the collection agency to pay the debt and remove the charge-off entry from your credit report.
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