Charge Offs - Do Not Just Pay Them

By Justin Hutto

Charge offs are detrimental to a good credit score. They occur when an account becomes delinquent for 6 months.

An effective way of erasing a charge off from you credit history is to dispute the listing. This is accomplished by sending a credit repair letter to the credit bureaus.

In the credit repair letter you need to include the reason the charge off should be deleted. Reasons often include: the account being paid, never paid laid or it's not your account.

Unfortunately when it comes to reporting on your credit report you are guilty until proven innocent. Meaning it is common for incorrect information to be on your credit report.

The Fair Credit Reporting Act was passed by congress in response to incorrect listings being reported. This piece of legislation states that any incorrect or unverifiable listing must be removed by the credit bureaus.

It is not un-common for one charged off account to result in many negative listings and a ruined credit report. Let me show you the process of what happens to a charged off account.

The original lender will take the outstanding debt and will sell it to a collection agency. This collection agency will try to collect on the debt. If they are unsuccessful they will be able to create a negative listing on your credit report.

The collection agency will then sell your account to another collection agency. The new agency will also try and collect and if unable they will report yet another new negative listing.

This process will continue dependent upon the size of the account. So one account can become many negative listings and ruin your credit score.

If you have many negative listings it will cause your score to go way down. It will also be difficult to get approved for new lines of credit.

In sum I encourage you to dispute the listing before you make payment. I would do this because making payment does not guarantee the listing will be removed.

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To learn more about how to remove charge offs or for a free credit repair letter to dispute negative listings visit us.