A charge off occurs when the creditor writes off a debt after a period of time. It happens when you stopped making payments and the lender has given up trying to collect the outstanding amount.
If you think that a charge off on your credit record is a mistake or inaccurate, you can dispute it.
Removing a charge off
Charge offs usually eventuate after 180 days of nonpayment of a debt. The creditor can pass the outstanding balance onto a debt collection agency and inform credit bureaus about the situation.
There are ways that you can have a charge off removed from your credit report.
Look at the details of the debt
Ask the creditor to provide you with information about the debt and the account details.
Pay attention to the name of the account holder as well as any other relevant personal information. Also, look at the amount of the debt and any errors made in recording payments and outstanding balances.
If you find discrepancies, then challenge them.
Pay to delete
A pay to delete is when you contact the debt holder, this could still be the original creditor or it may be a collection agency.
Offer to settle the debt in exchange that they remove the charge off from your credit report.
There is no obligation for the creditor or collection agency to agree. However, it’s worth a try.
If the creditor or agency agree, have them send you an official letter stating that they have permitted a pay to delete order.
Dispute the charge off
You can contact the credit bureaus (TransUnion, Equifax, and Experian) and let them know you think an error has been made regarding the charge off.
The bureaus need to investigate any disputes within 30 days.
If you want to dispute a charge off you need to provide the bureaus with:
● Your personal details and the account holder’s name
● Name of the creditor
● The date the loan was created
● The date when the charge off occurred
● Records of your payment history
● The outstanding balance
If your dispute is successful, the charge off will be removed. However, it will remain if it is found to be legitimate and accurate.
Use a credit repair agency
Credit repair agencies know what to look for when it comes to spotting inaccuracies in your credit report. Though you can do it yourself, credit repair companies can notice things that you may miss.
They then can dispute the errors on your behalf and try to get the charge off removed.
How long does a charge off last?
A charge off stays on your credit record for seven years. You will find that they can appear as either paid or unpaid.
If your record shows the charge off as paid, it means that you have fully settled the debt. Unpaid charges off are ones that you haven’t paid.
Paid charge offs have little effect on your overall credit score. However, they do show potential lenders that you made an effort to service the debt.
Charge offs happen when you have made non-payment on an account for an extended period.
If you think the charge off on your credit record is a mistake, you can dispute it with the debt holder. You also have the right to challenge it with the credit bureaus.
A charge off can still stay on your credit report for seven years. If it appears as paid, it can put you in good stead when you try to apply for future credit.