A charge off is when a lender says they can not collect a debt from you. It is a very serious item to have on your credit report. It frequently occurs with credit cards.
This will happen to your account after six months of no payments on a credit card. You can also have an installment loan charged off, but this will happen after three months. A charge off is a tax deduction for the lender. And your account will be sent to a collection agency.
Charge Off On Credit Report
You will have a charge off reported on your credit report. This mark will lower your credit score tremendously. You will also start being contacted by a collection agency attempting to collect this debt. They will be trying to collect a debt that has ballooned to a much larger balance. This is due to default interest rates and fees!
If the first collection agency is unable to secure payment from you. Then, they will take your account and sell it to another collection agency who will then begin to contact you. The first collection agency will create a negative mark on your credit report. And so will the subsequent collection agencies that unable to collect payment on your debt.
Your account will be sold from one collection agency to another. The bigger your debt. The more debt collectors will own your account. Additionally, if you have a sizable debt the collection agency can file a civil lawsuit. This can result in a judgment against you.
If you get slapped with a judgment on credit report, it will completely ruin your credit score. You could have liens placed against your property and even your wages garnished to repay this debt. We would encourage you to get help from a credit attorney, if your facing legal action.
Remove Charge Offs On Credit Report
Follow the four steps below to discover how you can settle this debt. And remove any bad credit or charge offs on your credit report.
1. View Your Credit File
You need to find out what collection items and credit card charge offs are listed on your credit reports. This information will be different from one credit report to another credit report. You must know exactly what marks you want to have removed, with each credit bureaus credit report for you.
2. File A Credit Report Dispute
You can hire a professional. Or do this yourself by writing a credit bureau dispute letter. Make sure to include in your letter:
- Your personal information
- The item you are challenging
- The reason for the dispute
- And any supporting documentation
3. The Credit Bureaus Will Investigate
According to federal law the credit bureaus must investigate your dispute. They will contact the lender or collection agency to verify the account and the related information.
If the lender or debt collector does not verify this information. Then the item must be erased from your credit report. Experts estimate that three in every four credit bureau investigations result in the removal of an item from credit reports!
4. Settle Any Collection Debts
If your dealing with bill collectors then use the two steps below to protect yourself.
- Request Debt Validation
This will require the collection agency to give you legal evidence that shows they have possession of your debt account. If they can not provide you this documentation. Then, you do not have to repay the debt. And the collection agency is suppose to have it removed from your credit reports.
- Negotiate a Settlement Agreement
If your debt is validated. Then you can negotiate a settlement agreement. As a condition of your settlement agreement, the collection agency must agree to stop reporting your account information to the credit bureaus. If you neglect to get this agreement. After you pay the debt you will still have bad credit.
If you’re working to fix your credit score, it’s vital to remove any dings, blemishes, and derogatory items from your credit file. These negative items are the cause of a low credit score.
We encourage our members to consider professional, legal, and affordable credit help. One of the top credit repair companies is the Credit Pros. They’ve helped their client’s remove all types of credit report dings including: charge offs, late payments, collections, judgements, liens, and many more.
Did you know in 2016 alone, over 9 million negative items were removed from consumers credit reports? You don’t just have to live with poor credit for seven long, expensive, and embarrassing years.
Take action and get a free credit consultation by calling toll-free 1-877-418-7596. And for more tips, strategies, and techniques about how to improve credit with Dan Willis, sign up for our free newsletter and join our congregation.
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