How to Get Charge Offs Removed from Your Credit Report

By
Mortgage and Lending with Indigo Financial Group Inc.

One important aspect of credit that everyone should watch out for are charge offs. When a charge off becomes part of your credit report, chances are, your credit scores will take a nosedive. As such, you need to know and understand about the effect of charge offs on your credit. What is a charge off? There are instances when you acquire a debt that you intended to pay in the first place. Usually, this is due after 30 days. When the due date arrives and you failed to pay it, the creditor does not immediately take action, but waits for your payment, until such time that non-payment reaches 180 days past due, sometimes less. Once this happens, they are constrained to consider the debt as uncollectible, and will report it as a loss to the company, reflected in their financial report, mostly for tax purposes. The debt is now reclassified as a charge-off. However, your accountability to pay the debt does not end there. The creditor company will still endeavor to collect on the debt by selling it to a third party collection agency, who will now run after your account, demand payment from you, or file a suit against you in court. Additionally, they will report your non-payment to the credit bureaus What is the effect of charge off on your credit report? A debt that has been reported as a charge off to the credit bureaus now becomes a negative mark on your report. The effect will be to lower your credit scores. Not only that. A charge off is a red flag for creditors, taken to mean that you are big risk as a borrower. The total effect? Chances are, when you apply for a loan, your application will be denied. Think of what this means to you, your pride, and your chances for life improvement. What should be done to remove charge off from your report? A charge-off stays on your credit report for 7 years from the date you first missed payment. Even after it has been paid, a charge off stays on your account as “paid charge-off.” Although this is slightly better than just a charge off, it still affects your ability to get a loan. The only way to improve your credit score is to completely remove charge off from your record. Disputing your account with the credit bureaus is still the best way to remove charge offs. If the bureaus cannot verify the veracity of any part of the account, then it has to be removed. If they do verify it, then your next avenue is to contact the collector and negotiate for the removal of the account from your report. You must make sure to put everything in writing to avoid being misled or denied later on. The important thing is that you should avoid getting to the point of charge off, and if you do get into this situation, immediately make reparations, for in the end, it is you who will suffer the dire consequences of having charge off on your report. Learn how to remove charge-offs and get more credit repair tips at AAACreditGuide.com.

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