Learn How to Remove Charge-offs From Your Credit Report
It can be very baffling to know what to do about charge-offs and other negative credit that winds up on your credit report. Can you get charge-offs removed and if so, what is the best way to take care of that? Should you pay off an older bad debt or leave it alone? The answer is yes. The confusing part is that yes is the answer to both questions!
If a lender is unable to collect a debt within a certain time period they will often just write it off their accounts as a “charge-off”. Oftentimes they will then refer it to a collection agency. The consumer needs to be wary when this happens as both the original lender and the collection agency can report the debt. This gives the consumer two derogatory marks for only one account.
An old charge-off will stay on your credit report for as long as 7 years. It is possible to get an old charge-off deleted from your credit report but a “paid charge off” is easier to remove than an “unpaid charge-off”. However an unpaid charge-off will drop off your report after 7 years but if you pay off the bad debt it will bring it current again and begin the 7-year cycle all over again and the bad debt will remain on your credit for an additional 7 years beginning from the time you paid it off. It is a catch-22 situation. You have problems either way.
The only solution to this dilemma is to employ a technique called a “pay for delete”. Before you pay off the old debt get a statement in writing from both the original debt owner and any collection agencies that they will remove the negative information from your credit report upon receipt of payment. This is the only efficient way to pay off an old charge-off and deflect future difficulties.
Many people are not aware that they have the right to dispute items showing on their credit report. The Fair Credit Reporting Act states that any consumer can dispute any bad debt on his or her credit report and this includes charge-offs, collection accounts, tax liens, judgments, repossessions and even bankruptcies and foreclosures. You can dispute these things and get them deleted yourself or you can hire a professional credit repair agency to assist you.
In order to dispute items on your credit report you will need to contact the credit reporting agencies. You can do this by a phone call or contacting them online but the best way to contact them is to send a formal letter. This way you will always have a paper trail. The credit reporting agencies have 30 days to investigate your claims so be sure to document all dates.
Within the 30-day period the credit agencies are required to contact the original debt owners and the collection agencies to see if they dispute the allegations. They should also search any public records regarding the debt within the same 30-day period. You need to be sure that you follow up regularly as credit repair can take some time but it is sure to take even more time if you are not following through.
You can repair your credit on your own but there are professional credit repair companies that have the legal expertise and knowledge to help in the process. It may be worth your time to contact one of these companies first to see if they can make it easier for you.