A charge off is what a lender or creditor will declare when they decide your debt is unlikely to be paid. There are two types of charge offs:
1. Credit card accounts and revolving credit
With a credit card account or revolving credit account, a debt will be charged off after 180 days of delinquency.
2. Installment loans
With an installment loans such as a mortgage or car payment. Your account will be charged off after 120 days of delinquency.
Charge Off On Credit Report
Have you discovered a charge off account on your credit report? This is a very damaging item and it will cause your credit score to drop significantly. A great way of building credit is to remove charge offs from your credit report.
How To Remove Charge Offs From Credit Report
Were going to review 4 steps to remove charge offs from your credit report. You don’t just have to live with a charge off for 7 long years!
1. Get Your Credit Report
Get updated and current copies of your credit reports from all 3 credit bureaus. This includes: Experian, Equifax, and TransUnion.
2. Dispute The Credit Bureaus
Next, you will file a credit report dispute with the credit bureaus. Your going to dispute the charge off listing. You can do this by sending a dispute letter. We would encourage you to send your letter using certified mail.
This will give you evidence the credit bureaus received your dispute letter. You can also file a dispute online or by phone. Just remember, you must dispute all 3 of the major credit bureaus.
You can also hire a professional credit repair attorney to do this for you. Don’t forget it is your federal right to dispute items on your credit report. This right is protected by the Fair Credit Reporting Act.
A piece of legislation that gives you and every citizen. The right to dispute any item on your credit report. Any item you believe is incorrect, inaccurate, or questionable.
3. Credit Bureau Investigation
When the credit bureaus get your dispute and find it valid. They will investigate the charge off on your credit report. They will contact the original creditor.
For example, if you have a credit card charge off, they will contact the credit card issuer. Often, when the credit bureaus contact the credit card issuer. Your account will have already been sold to a collection agency. And the credit card issuer will not be willing to verify the account with the credit bureau investigation.
This is because they are only spending money on time and resources. Once the account is sold to a debt collection agency. The original credit card issuer can NOT accept payment on the account anymore. If the credit bureaus are unable to verify your account. Then according to the Fair Credit Reporting Act, it must be removed from your credit report.
4. Results Of The Credit Bureau Investigation
The last step, is you will get a letter in the mail from each of the 3 major credit bureaus. This letter will inform you of the results and action taken on the charge off item on your credit report. It will say if the item was verified.
Or if it was removed from your credit file. If your charge off has not been removed. You can still negotiate with the lender to have it removed. It may require payment. But, you don’t just have to live with bad credit for 7 long years.
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