Charge Offs – You May Not Have to Pay

If you have a charge off it will cause your credit score to be lower. A charge off happens when an account is not paid on for 6 months.

To delete charge offs from your credit history you have to dispute the charge off. You can do this by sending a credit repair letter to the credit bureaus.

In your credit repair letter you should explain why the listing is incorrect. For example the account has never been paid late, it’s not your account or information is wrong.

The way our credit system works is you are guilty until you prove your innocence. What I mean is the incorrect information is true until you prove otherwise.

In response to incorrect information being reported congress passed the Fair Credit Reporting Act. This says that any listing that can not be verified must be removed from your credit report by the credit bureau.

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.

Then the collection agency will turn around and sell your debt to another collection agency. This new collection agency will be able to report a negative listing if they are unsuccessful in collecting payment.

This process will continue through any number of collection agencies. It depends upon the size of the delinquent account. You can see how one account can ruin your credit score and turn into multiple negative listings.

With a number of negative listings it will ruin your credit score. This will also make it hard to be approved for any new credit lines.

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.