Credit Companies

How to Get Rid of a Charge Off?

Quick Answer

Removing an authentic charge off from your report is not always in the cards, but it doesn’t hurt to try. You can attempt to do so by dealing with your creditor or debt collector.

At times, certain situations arise that render you incapable paying your debts in full. By the end of 2020, the delinquency rate of consumers loans, including credit cards, for Americans was 1.96%. The marking of an overdue loan means that a charge off is in the books for your account. This can have a lasting impact on your credit, which is why you need to be aware of what a charge off is and how we can get rid of it from the credit report.

What Is a Charge Off?

When you are long overdue on a debt payment, the creditor ceases to seek the payment and writes the debt off as a company loss. In addition, they cancel your accounts with the company and may report your case to the credit bureaus, claiming your debt to be “uncollectable”.

A charge off is only to be expected after a few months of pending payments, after the debt has been offending for a long while, usually on average 120-180 days. A creditor can claim a charge off for any sort of credit loan like credit cards, medical loans, student loans, auto loans and more.

It is important to remember that a charge off does not diminish your loan, rather it is passed off to someone else. Your debt is still in session and after a charge off, you have to further deal with the results of a charge off on your credit report.

How Does a Charge Off Affect Credit?

Regrettably, a charge off is known as one of the most severe derogatory marks to be present on your report. It indicates to potential creditors that you are not dependable and are unable to pay back your debts. This mark can remain on your report for up to seven years, meaning it will damage your chances of credit approval for several years.

The months leading up to charge off and the charge off itself can be very harmful to your credit score and can substantial lower it by many points. If the charge off is reported to a collection agency, a collection account will show up on your report which additionally decreases your credit score.

Paid and Unpaid Charge Offs

A charge off is evident on your credit report as either paid or unpaid. When you make a full payment in the elimination of a charge off, it will change to “paid”. In spite of that, the charge off will not disappear from the report, it will just have a nominal effect on your credit report. In addition, the creditors that go the long way to ensure your credibility will see that you have paid the charge off in full.

If the charge off remains unpaid, the debt will be pursued by the collection agency or the lender.

What Are the Steps to Remove an Accurate Charge Off?

The following steps help in an attempt to remove an accurate charge off:

1.    Examine the details of the debt.

Gather all the information of your debt, like the amount, the date and the lender. You will need to barter with the creditor owning the debt and with the original creditor if the charge off is sent off to a collection agency.

 

2.    Attempt to haggle a pay-for-delete arrangement

If your debt remains with the original creditor, you may deal with them to remove the charge off from your report after payment. This can also be done after it has been sent to a collection agency. However, the original debt owner would be rather willing to do so because they would receive the money.

 

If your debt is in the collection agency, the collectors have the option of reviewing your credit to see if you can pay off the debt, which aids in creditors cooperating with you. In addition, you can presume that the collection agency will only demand a portion of what you actually owe.

 

Professionals advise you to barter for 25% of what you owe, finally settling on an amount you can afford and the company will accept. However, if your debt is a small balance, you will have to make the payment in full.

 

There are pay-for-delete letter templates you can utilize to see if someone will power will refer them to your case. In addition, make sure you address the letter to the manager or someone with authority to approve your request.

 

3.    Get written evidence for any arrangement.

A pay-for-delete arrangement is a legal proceeding under the Fair Credit Reporting Act. However, the creditor isn’t compelled to approve the request and eliminate the charge off from your report.

 

This is why you need to make sure that you receive the pay-for-delete agreement in writing, with all the details on the company’s letterhead. Including the amount of debt, the confirmation that will not be hounded for any more payments and that the charge off will eliminated from your credit report.

 

What Should We About an Inaccurate Charge Off?

Review your reports to ensure the accuracy of all information, disputing any inaccuracies. These inaccuracies can be the dates of the debts, missed or late payments, the amount of the debt, the account number, lender name, debtor name and more.

When you dispute errors information to a credit bureau, they send off the dispute to the company that first addressed the data. Generally, you have 30 days to prove the accuracy of the dispute and remove the charge off from your report.

You can do this process yourself, but a charge off is a severe case that may damage your credit for several years, which is why we advise you to employ he help of a credit repair agency like the Blackwater Credit Repair to help make the process simple and effective.