3 Ways to Remove a Charge Off from Your Credit Report

04-07-2017 | Ramona |

With national credit reporting agencies wiping tax liens and civil judgments from their records this July, millions of Americans can expect to see a slight improvement in their credit score.

A better score allows families to buy a new car, take out a mortgage, or start a small business without having to worry about skyrocketing interest rates. Your credit score can even affect your hireability on the job market.

Nowadays, credit is a central part of everyday life. A good credit score gives people more purchasing power, but not everybody has an 850 credit score. Several things can negatively affect your rating, including late payments, multiple accounts, and a high credit utilization rate.

One of the most damaging items that you can have, though, is charge offs on your credit report. This happens when you fail to pay off your debts for several months in a row, causing your creditor to close the account.

Charge offs stay on your credit report for seven and a half years, so it’s a good idea to remove any entries that you see on your credit account as quickly as possible. Here are three simple approaches that you can take when trying to remove a charge-off from your record.

Negotiate with Your Creditor

It’s best to try and deal directly with your creditor when dealing with charge-offs. Creditors will often pass the account on to a debt collection agency relatively quickly, so it’s best to move fast. Call your creditor to negotiate the removal of the charge-off, offering to pay the balance in full or set up a payment plan.

The more you’re able to put down up front, the more negotiating power you have. In exchange for payment, your creditor may be willing to drop the charge-off from your credit report so that it won’t affect your borrowing capabilities in the future. Be sure to get everything in writing to keep for your records.

Send a Pay for Delete Letter

You can send your creditor a letter offering full payment or your balance, and in exchange, ask that the charge-off is removed from your credit report. Sending a pay for delete letter is a good way to keep a paper trail of correspondence between yourself and your creditor, but you need to make sure that you address it to the right individual.

Instead of sending your letter to the agency’s general correspondence address, find the name and address of a manager or other senior employee to get your request noticed.

Dispute the Account

If all else fails, you can present your case to the credit bureaus to get a charge-off removed from your report. The Fair Credit Reporting Act (FCRA) allows you to dispute anything that you find suspicious on your credit report. If your creditor doesn’t verify a disputed account within 30 days, the charge-off will be removed from your credit report.

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