Learn How To Remove Charge-offs From Your Credit Report Now!

There is a great deal of confusion among consumers about what to do about charge offs on a credit report. It is well known that charge-offs are considered to be derogatory credit but what is the best way to handle it? Do I pay off this bad debt? Do I not pay off this bad debt?

Well the answer may surprise you as for both questions is “yes”!

The term “charge-off” just refers to a debt that the lender was unable to collect. Often they will give up trying to collect and give the bad debt to a collection agency. Often this makes it worse for the consumer as both the original lender and the collection agency can report the bad credit. This makes 2 negative marks on the credit for just one account.

An old charge-off can stay on your credit report for as many as 7 years. It is possible to get an old charge-off removed 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 make it current again and start the 7-year cycle all over again and the bad debt will remain on your credit for an additional 7 years starting from the time you paid it off. It is a catch-22 situation. You have difficulties either way.

So what is the best way to handle this situation? Well before you pay off the old debt make sure that you get a statement in writing from both the original debt owner and all of the collection agencies that states that once the debt is paid they will remove it from your credit report immediately. This technique is called a “pay for delete” and it is the most effective way to pay off an old charge-off.

Many people are unaware that they have the right to dispute bad credit showing on their credit report. The Fair Credit Reporting Act states that any consumer can dispute any derogatory credit 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 help you.

You can dispute items on your credit report by contacting the consumer reporting agencies that are reporting the bad credit. You can call them, write them or even contact them online, however, the best way is to write a formal letter so that you have proof. Make sure that each agency gets the same letter and make sure you keep copies with everything documented. They will have 30 days to investigate so make sure that you document the dates.

The credit agencies are required to follow up with the original lenders and any collection agencies. They are also supposed to search the public records on your accounts. Make sure that you follow up with them after the 30 days is up to see that they are working with you. Credit repair can take awhile but it will take even longer if you are not following up with your own requests.

While it is possible to repair your credit on your own a professional credit repair company has developed the knowledge and expertise to expedite the process. Since a professional can do it faster and easier it may be worth your time to consult with them first to see if they can assist you.

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Filed Under: Credit