When a credit report includes a charge off, it means that you are a bad debtor who has a debt that creditors have deemed unrecoverable. It occurs after sometime of non-repayment of any form of borrowing such as credit card or personal loans. Charge offs also lower one’s credit score in a big way and can remain on credit report for 7 years.
Yes, it is possible to get a charge off removed from your credit report but this is not an easy thing to achieve especially if you are a candidate of the credit card company. Here are some tips:
1. Negotiate with the creditor: The best first step one should take when faced with the charged off debt should be to try and negotiate with the creditor and give the settlement amount. Pledge to pay off the total amount at once, but at a lower value than the actual balance. If they do and you have paid as per the agreement reached, it is wise to demand for a “paid as agreed” letter confirming to the effect that you have fully paid for the debt, and also ask them to request for the removal of the charge off from the credit bureaus.
2. Dispute the charge off: Even if the creditor agrees to delete it, it is recommended to dispute the ‘charge off’ with the three credit bureaus; Equifax, Experian and TransUnion. This can be done by writing a comprehensive letter in strong terms stating why one is against it and other forms of evidence including payment records or the “paid as agreed” letter if one settled the amount. Also request for an investigation to be made on the credit report.
3. Fix account status errors: It is also possible that some of the charge offs contain wrong account status, say, “unpaid” while in fact they have been paid. Negotiating can cause the status to be changed to “paid” or “settled”, which may not erase but can seem more desirable.
4. Prove inaccuracy due to re-aging: If you have a charge off that is still displaying the recent date even though the charge off occurred years ago, you can contest that the creditor is improperly ‘re-ageing’ the account. Date the actual age of the debt so that you can prove beyond any doubt that the debt is so old it cannot be legally recovered. I will request that proper aging be restored, this will ensure that the charge off fall off your report earlier.
5. Try goodwill removal requests: You can write amicable letters which are polite requests for the creditor to remove the negative item because they have never been in any default before and/or after the event. Some of them may sympathize and extend their hand to support by agreeing to remove it as a way to oblige.
6. Wait it out: If the above do not in any way help to make it removed, dispute it continually while addressing your other accounts the right way in the future. If it stays on your report for a couple of years after it happened, it should be removed and it should not affect your scores as much.
7. Watch out for scams: Be cautious companies that seek to make people believe that they can delete all the negative records for a certain fee. They are often a fake. Before approaching an agency to help repair credit, one should research the agency thoroughly. Some of the authentic credit counselors can even assist you in settling or disputing your payments for a reasonable monthly fee.
Based on this, the best approaches include handling the creditors through direct contact, disputing every entry, and waiting for about 3-5 years for the impact of the charge off to fade. While paying the debt doesn’t cause it to go away, it is less damaging to a creditor’s reputation than if they were to default on it. In this case, your scores may gradually improve if you consistently practice and learn not to develop new problems.