Posts Tagged ‘charge off’
Get a Charge Off Removed?
Charge offs are bad debts that your creditor has disposed of. They will appear on your credit report with the words “Charge Off” written at the beginning of the file. The amount of the debt may be zero even though you know that you still owe a balance or there may be a dollar amount attached. If you have charge offs on your credit file, you should know that they can be tricky to deal with. Since it is almost impossible to have a charge off removed, you should focus on lessening the impact that your charge off account has on your credit score.
If your charge off has a dollar amount attached to it, the first thing you need to do to improve your credit score is to get it down to a zero balance. This does not mean that you have to pay the full amount listed in your credit report. In many cases, the creditor will settle your account for pennies on the dollar owed. Offer to pay anywhere from 35 to 50 percent of the balance owed in exchange for your reported balance being brought down to zero. Your charge off will not be removed. However, a charge off account with a zero balance only does as much damage to your credit as a charge off account that has been paid in full. So, never pay 100% of your debt on a charge off.
You should also take into account the amount of time that the charge off has been on your credit file. Entries on your credit file that are more than four years old do not affect your credit score as much as more recent entries. If you wish to pay off a charge off account that is more than four years old, pay as little as you possibly can to settle it. In most states, creditors cannot sue you for delinquencies that are older than four years. So, their hands are tied. They should be more than willing to offer you a sweet settlement.
Keep in mind that you can damage your credit score by paying off an old charge off account. As mentioned before, new entries carry more weight than old entries. If you make a payment or set up new payment arrangements on a new account, the date of the account is updated to reflect the new contract. This means that you could lose credit score points because the account will appear as if it is a new account. The file will also remain on your credit file for seven years from the updated date. So, weigh your options carefully before you decide to pay off an old account.
Tags: charge off, charge off removed, charge offs, credit, Credit Repair, repair bad credit