Charge-offs are one of the leading cause of low credit scores. Every day, people have unpaid debts and either refuse to pay them or forget that they had the debt altogether. This leads them to get in legal troubles and having a low score that would take years to bring back to normal.
We want to give you the right information on helping you remove your charge-offs. Doing so allows you to preserve your credit history and prevent further financial damage. You’ll have the knowledge and the confidence to self-negotiate with creditors about the status of your charge-offs by the end of this article.
What Is A Charge Off?
Charge-offs is a fancier way of saying that you have an unpaid debt. A charge-off occurs when you fail to make a credit card payment within the span of a few months. The creditor will write off your debt as a loss, close your account, and demand that you fully pay the unpaid balance.
Once your account is charged off, it’s already too late. Your credit score will take a hit and chances are your credit limit will be lowered. We suggest paying off your bills on time to prevent multiple charge off notices on your credit report.
What Does Charged Off Mean?
A charge off on your credit history states that you are unable to make payments on time. Also, it lets future landlords and creditors know that you might be a financial risk if they accept your applications. Charge-offs decreases the chance of your application being successfully passed through most credit institutions; making it harder for you to establish a good credit line.
Getting charged off is a problem that occurs in most households. The owner of the account will either forget or neglect their monthly payments altogether. When you receive a charge off, it’s often difficult and will require a lot of negotiations and payments to remove it from your credit history.
How Long Does A Charge Off Stay On Your Credit
Most beginners tend to ask “how long do charge offs stay on your credit report?”
On average, charge-offs can remain on your credit history for about to seven years. From the date that the unpaid debt was marked charged-off, it will take seven and a half years for it to fully be removed. This lasts for a long time and can make a huge negative impact on your credit history.
You’ll want to remove the charge-off quickly. The longer you neglect it, the higher the chances you’ll receive a myriad of problems later down the line. You run the risk of getting sued, destroying your credit, or being constantly in debt if you let it linger long enough.
How To Remove Charge Offs Yourself
It’s important to know how to remove charge-offs from your credit report. Charge-offs can turn fatal if you don’t pay them off in time. On some occasions, companies will undergo legal action if you remain not to pay the withstanding debt.
Your best tactic to remove a charge-off is through a thorough consultation with the company you are indebted to. Most of the time charge-offs are given to a third-party debt collector after the charge-off date period.
Deal with the primary creditor (the person who reported the charge off initially) and not the debt collector. Contact them and begin to make negotiation plans on the removal of the charge-off. Convince them to remove the charge-off in exchange for your payment of the debt that you previously owed.
Before calling, know exactly how much debt you can pay on account. The more you can pay and the faster you can pay it, the more negotiating power at your disposal. If you can pay off the debt in one lump sum, then you’ll be in the best position to negotiate. Ask for someone who is authorized to remove the charge-off from your credit history.
Tell the creditor that you are ready to make pay arrangements in exchange for the removal of your charge-off status. Professionally talk to them. You don’t want to blame the creditor or make excuses. In the best case scenario, the creditor will agree to the negotiation.
Send A Pay For Delete Letter
Alternatively, you can send a pay for delete letter to help remove your charge-off. A pay for delete letter explicitly asks the creditor to remove the charge-off in exchange for complete debt payment.
You’ll want to make sure that the letter reaches the correct hands. Get the name of someone who directly works for the company. For instance, a manager or another high-level position might do the trick if you are planning to remove the charge-off.
Get Negotiation Agreements In Writing
In the financial world, written documents are a main source of proof. A lack of written proof leaves you at a huge disadvantage if you are summoned for legal action. That’s why you need to get your creditor’s negotiation agree in writing before you proceed further with the payment plan.
There are two ways you can obtain a written document from your creditor:
- Have a company employee send you a fax copy of the agreement.
- Obtain the name, phone number, and mailing address of the company employee you spoke with. Send them the copy of the agreement via mail with a receipt return. Request that the person signs and sends a copy back to you.
Remember, you don’t want to make a payment until the agreement is signed by writing. This prevents you from wasting unnecessary dollars. Doing this ensures that you’ll successfully conduct the negotiation and remove the charge-off from your credit report.
After receiving a written agreement, then pay off the debt in a considerable time period. If done correctly, you’ll have your charge-off completely removed.
To conclude, your charge-offs could be the main thing that’s reducing your credit score. It is up to you to make sure that you contact the right people to ensure that it remains fully removed. This preserves your financial health in the long run. Ultimately, through negotiation and debt repayment you’ll have a charge-off erased from your credit history.