It can be very baffling to know how to handle charge-offs and other negative credit that winds up on your credit report.
Can you get charge-offs deleted and if so, what is the best way to take care of that?
Should you pay off an older bad debt or leave it alone?
The answer is yes. The baffling part is that yes is the answer to both questions!
When a lender is not able to collect a debt they remove it from their accounts and claim a charge-off to your credit account. Many times they will then give the account to a collection agency which can be a double whammy for you as the consumer because both the original lender and the collection agency will report the bad credit for just one debt.
You can get a charge-off removed from your credit report but it is simpler to do this if the charge-off is paid in full. The problem is that once you pay off an account it brings it current. An old charge-off can stay on your credit for 7 years but when you pay it off the 7 years begins anew. Therefore by paying off your charge-off you essentially added on to the time it will be on your report for an additional 7 years no matter how long it was on the report before you paid it off.
So what is the best way to handle paying off a charge-off? Well before you pay off the old debt make sure that you receive a statement in writing from both the original lender and all of the collection agencies that states that once the debt is paid they will remove it from your credit report immediately. This technique is referred to as a “pay for delete” and it is the best way to pay off an old charge-off.
Are you conscious of the fact that you have the right to dispute any items shown on your credit report? The Fair Credit Reporting Act was enacted to provide consumers the right to dispute anything that shows on your credit report, including charge-offs, collections, tax liens, judgments, repossessions, foreclosures and even bankruptcies. You can attempt to repair your credit yourself or you can hire a professional credit repair company.
To dispute something on your credit report begin by contacting the consumer reporting agencies. You can call them on the phone or contact them online but the best way to contact them is to write a formal letter. That way you will always have the record of a paper trail. Make sure each agency that is reporting the bad credit gets a copy of the same letter and make sure that you keep solid documentation of all of your attempts. The agencies have 30 days to check out your claims sobe sure you document the dates.
The credit agencies are required to follow up with the original debt owners and any collection agencies. They are also required to look at the public records on your accounts. Make sure that you follow up with them after the 30 days is up to see that they are working with you. Credit repair can take awhile but it is sure to take even longer if you are not following up with your own requests.
You can repair your credit on your own but there are professional credit repair companies that have the legal expertise and knowledge to help in the process. It may be worth your time to contact one of these companies first to see if they can make it easier for you.
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