To fix or remove charge offs, strike a bargain in exchange for partial or full payment of the debt with your creditor or collection agency. Ask the creditor if they will remove the citation from your credit report if you agree to a settlement. Ask for an agreement letter in writing before submitting payment in the form of a money order or certified check. In case you are working with a credit repair specialist, keep the organization informed about any creditor correspondence you get directly.
A charge off is one of the unfavorable things you can have on your credit report. It usually happens when you fail to make your credit card payment for several months, mostly six months in a row.
By the time an account gets a charged-off, your credit score has already suffered significant damage. Your credit card issuer might also have lowered your credit limit. In case you applied for a credit card in the months leading up to your charge-off, your application might have been denied. In this feature, we will look at advanced ways to remove charge offs as well as how it affects your credit.
What is a charge off?
What does a charge off mean?
When a credit account is unpaid for more than six months, a creditor usually writes off the debt as a loss on their fiscal statements. This is known as a charge off. After a debt is charged off, it is either transferred to an in-house collections division or sold to a third-party collection bureau who will possibly contact you in an attempt to recoup the balance.
Typically a charge-off is one of the most harmful items, short of bankruptcy. Besides the annoying calls and emails, a charge off brings bad news for your credit report. Not only will it possibly remain in your file for up to seven years, but it might significantly impact your credit score as well.
In response to a lower credit score, future creditors and lenders may deny any future credit card and loan applications. They may also raise your interest rates, resulting in higher payments and more money spent over the life of a loan. The worst news is, as long as the charge off remains unpaid, the creditor can keep attempting to collect on the account, and that might include suing you for what you owe. Consequently, it may be in your best interest to remove charge-offs from your credit report.
How to dispute a charge off?
Removing charge offs from credit report
Do not let a charge off on your credit report keep you from getting a good credit score and starting the life you deserve: use the following ways to fix the charge off on your own or with the assistance of a credit repair specialist.
Review and validate information on your credit report
Incorrect reporting can result in additional damage to your credit report. By investigating and communicating the details of your charge off with creditors and the three credit bureaus, you might be able to improve the status of a questionable charge off or entirely remove it from your credit reports. Entries the creditor should be able to prove in writing include:
- The initial agreement between yourself and the lender
- A transfer of debt ownership to a third-party collection bureau (if applicable)
- The current account balance
- Your payment history
- Charges and penalties added to the credit account
- The collection agency’s bonded right to pursue the debt in your state of residence
The collection agency or creditor has thirty days to validate your debt. In case they cannot, it must be removed from your credit reports.
Negotiation with your creditor
Frequent, charge-offs are passed on to a third-party debt collector soon after the charge-off date. However, when it comes to charge-offs, it is better to deal with the original creditor than a debt collector. A debt collector cannot do anything about what the original creditor reports to the credit reporting agencies.
You need to convince the creditor to remove the charge-off from your credit report in exchange for payment. Before you place the call, know how much you can pay on the account. The more money you can pay and the sooner you can pay it, the more negotiating power you have. In case you can pay in full, you are in a better position to negotiate. Request to speak to someone who has the authority to remove the charge-off from your credit report.
Start by letting the creditor know you are interested in paying the account, and you would like to make payment dispositions in exchange for having the charged-off status removed from your credit report. The critical thing is to speak professionally and politely. Also, do not blame the creditor or make excuses, or give them your life story. Just keep it short, simple, and to the point. In the best case, the lender or creditor will accept to remove the charge off from your credit report.
Contact the creditor in writing
Another way to negotiate with a creditor for a charge off removal is by sending a pay for delete letter. Typically the letter asks the creditor to remove the account from your credit report in exchange for full payment. In writing to the lender or creditor, you are trying to make sure at least one of the following happens:
- Charge off status deleted from your credit report. This is the best-case scenario.
- Charge off status changed to closed or paid. This is the most popular case scenario and the best alternative to removal.
- Charge off changed to settled status. This is the least preferred alternative since the word settled is frequently seen as being paid in the collection.
The key to a victorious pay for delete is getting the letter to the right hands. Ensure you get the name and direct address of someone who works in the organization, a manager, or any other higher-up staff, instead of sending your letter to the general correspondence address.
It can be challenging to get a creditor to accept to delete the charge off from your credit report. Even so, some cardholders have successfully made a delete agreement.
Get the agreement in writing before paying
When the creditor accepts to delete the charge off from your credit report, get the agreement in writing. Typically, you can do this in two ways.
- Get the name, phone number, mailing address of the person you spoke with. Then send a copy of your agreement to that individual through certified mail with return receipt requested. Ask the person to sign and return a copy to you.
- Have the person you spoke with fax give you a copy of the agreement on the organization letterhead.
Being cautious about making payment until you have the agreement in writing can prove that beyond any doubt, someone from the creditor’s office made the agreement. Not doing so can reset the clock on your charge off, meaning it will be another seven years from the date you made the payment before the entry is removed from your credit report.
After you have fulfilled your part of the agreement, check your credit report to ensure the creditor has removed the charge off.
Allow the credit experts to manage the charge offs for you
While it is possible to fix the charge-offs on your credit report yourself, most people prefer to have a credit repair company manage this delicate process on their behalf. Here are the top-rated credit repair services to help you get started.
CreditRepair.com: Does CreditRepair.com remove charge offs?
CreditRepair.com goes beyond fixing credit by focusing on accuracy, fairness, and substantiation. In a nutshell CreditRepair.com :
- Has free consultation: 1-855-200-2393
- Offers free access to your credit report summary
- CreditRepair.com member sees an average forty-point increase in Transunion credit score during the first four months
- Through its three-step plan for checking, challenging, and changing your credit report, members have observed seven percent negative items removed per month.
- Has online tools to help clients track results
Sky Blue Credit Repair: Does Sky Blue credit repair remove charge offs?
Sky Blue Credit Repair has been assisting people nationwide solve their credit issues since 1989. With an intensive staff of highly-trained professionals, Sky Blue might be best known for its dedicated customer service. Known as The Sky Blue Difference, this bureau’s goal is to offer professional analysis, credit score assistance, faster disputes, and credit building help. In a nutshell Sky Blue Credit Repair:
- Has been in business since 1989
- Has a free consultation service: 1-888-805-4944
- Ninety-day 100% money-back guarantee
- Quick pace: Sky Blue disputes fifteen items monthly, and trace your progress 24/7
- Low $79 costs to get started, pause or cancel your membership anytime
Lexington Law: Does Lexington law really remove charge offs?
Yes, it does. Lexington Law has assisted hundreds of thousands of consumers to remove untimely, inaccurate, misleading, or questionable charge offs from their credit reports. Via effective credit reporting agencies and creditors disputation, Lexington Law’s members experienced 10,000 removals like charge Offs in 2017. Some of these members were able to fix charge offs with lower-priced Lexington products, and others required the Lexington Premier service. With Lexington Law, you can expect:
- Free consultation; 1-855-200-2394
- Cancel anytime
- Has generated most results of any credit repair law firm
- More than 500,000 repair consumers have been helped since 2004
- Clients experienced over 9 million negative items removed from their credit reports in 2016.
Waiting for the citation to expire
In case your creditor or credit collection agency will not delete the citation, repaying the debt could actually cause more harm to your credit score. Re-aging happens when the date of the last derogatory notation is updated on your credit report. Thus if you decide to pay a long-overdue collection account, it can reactivate the debt on your credit report, causing unnecessary harm. In such a case, it is significant to weigh the benefits and disadvantages of debt repayment. Whereas seven years is a long time to wait, it might be preferable to re-aging old debts.
Note that charge offs are delicate and sophisticated in nature, and choosing the right path is dependent on your situation.
What happens when a creditor doesn’t remove a charge off?
If a creditor does not agree to remove the charge off, paying the debt will not instantly improve your score. A settled or paid status does not change the fact that it is still charge-off on your credit report.
Your score will improve gradually with time in case you decide to pay, but it will not have the same influence as it would if the charge off was entirely removed. After you have paid your debt, remember to ensure your credit report reflects the payment.