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Removing Charge Offs From Credit Report

What is a Charge Off?

A charge off happens when your creditor declares your account a loss. After 180 days of not making the minimum payment on your account, the bank can declare a charge off so that your account can be documented as a loss for the company. However, this doesn’t mean you’re forgiven of the debt. They will still expect you to pay the debt, and you can expect them to make repeated attempts to collect it.

Once a charge off is declared, your creditor will then add the negative entry to your credit report, which will seriously affect your overall credit score and make it difficult for you to get any kind of loan. This entry will remain on your credit report for 7 years from the date it was placed. Should you pay the debt eventually, they will upgrade your charge off to “charge off paid” or “charge off settled” on your credit report. While that entry still remains on your account for the remainder of the 7 years, it will improve your score.

How can I get it removed?

Removing charge offs from credit reports is often difficult. The most common ways are to just pay the debt and ride out the 7 years. However, one thing you can always do it try to negotiate with the creditor. Don’t ever try to negotiate with a collection agency when it comes to a charge off. They are not interested, nor do they report any information to the credit reporting agencies like the creditor does.

Before you contact your creditor make sure you have your facts straight. Sit down and figure out how much you can afford to pay on the account on a monthly basis. Your goal is to come to an agreement to remove the charge off in exchange for paying down the debt. Therefore, the more you agree to pay, the faster you can pay down the debt, the more negotiating power you will have. You may have to make short term sacrifices to make this happen, but it will be worth it to avoid a 7-year ding on your credit report.

Once you call your creditor, make sure you’re speaking to someone who has the power to help you. If you get stuck speaking to a lower level employee, you may get told no by someone who couldn’t help you even if they wanted to.

When you’re calling to ask for something like this, make sure you remain polite and professional at all times. Do not ever blame the creditor for your situation, or give them a laundry list of excuses. Keep the conversation brief and to the point.

Once an account gets charged off, it’s often difficult to get the creditor to budge. However some people have had success with this method, and you really don’t have anything to lose by calling them, so it’s worth a try.

If you are successful, make sure you get the terms of your agreement in writing. This will protect both you and the creditor. Also, try not to agree to make a payment on the account until you have an official written document that reflects the agreement and exactly who at the company signed off on the agreement.

Once you’ve paid the debt make sure that information is reflected on your credit report so you can move forward.

If you’re not successful and the charge off remains on your account, it’s generally best to try and pay down the debt. Mortgage lenders, banks and car loan companies won’t give you a loan if you have an outstanding debt on your credit report. This can be problematic if you plan to make a sizeable purchase in the next 7 years. That’s why it’s always better to have a “charge off settled” or “charge off paid” entry on your report than just the charge off.

There’s no real sure fire way to remove a charge off except just waiting the mandated 7 years, however sometimes negotiating with the lender can help. If nothing else, it won’t make things worse!

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