What is a Charge-Off and Can it Be Removed From My Credit Report?
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A charge-off is a negative mark on your credit report that shows you’ve missed payments or have defaulted on debt. The impact varies by person and credit model, but it can drop your score significantly. If you have a poor payment history, a single charge-off can reduce your credit score by 100 points or more. Combined with late payments and a closed account, the effect can be even worse.
A creditor will typically “charge off” an account if you miss payments for 180 days or more. When they do, they’ll close the account and report it as a charge-off to the credit bureaus. The CRAs will then update your credit reports to reflect this change in status. Credit Repair Coral Gables often sell charged-off accounts to third-party collection agencies, who then try to collect the outstanding balance. At this point, the original creditor no longer has any legal right to pursue you for the outstanding debt, but the collection agency can still contact you and send you notices.
After an account is charged off, it may remain on your credit report as a derogatory mark for up to seven years. During this time, you’ll likely be barred from opening new accounts with the original lender. The CRAs might also add the charged-off account to your collection accounts section of your report, which can make it more difficult for you to get approved for loans or credit cards.
What is a Charge-Off and Can it Be Removed From My Credit Report?
The good news is that there are ways to remove a charge-off from your credit report before the seven year period ends. The most effective way to do this is to negotiate a pay-for-delete agreement with the creditor or collections agency. The creditor or collection agency is not obligated to do this, but they’re often willing to remove the charge-off from your credit report in exchange for being paid in full.
Another method for getting a charge-off removed from your credit report is to dispute it. Credit reporting agencies (Equifax(r), Experian(tm) and TransUnion(tm)) are required by law to investigate your claims of errors on your credit reports and correct them if they’re found to be true.
If you have proof that the information reported on your credit report is inaccurate, such as a faulty late payment, you can ask for it to be corrected or removed from your report. It’s best to do this as soon as you discover the error, so the agency has the opportunity to fix it before the time period for which the charge-off will remain on your report expires.
You’ll need to know how to properly dispute credit report errors and how to prepare your documents before you file a claim with a credit bureau. If you aren’t familiar with the process, it might be worthwhile to hire a professional company that offers Credit Repair Coral Gables. It’s important to work with an experienced credit repair service because they can help you identify and dispute mistakes on your credit report that could be weighing down your score.