Negative information, including charge-offs, can remain on your credit history for up to seven years and significantly hurt your credit score. However, removing a charge-off from your credit may be possible sooner th♔an that so you can begin rebuilding your credit score. 

What Is a Charge-Off?

When a creditor gives you a loan or 澳洲幸运5官方开奖结果体彩网:line of credit, it assumes you're going to pay back what you borrow. If you fall behind or stop making payments, your account can become delinquent. Once an account has been delinquent for an extended time, the creditor may charge it off. This period typically ranges from 120 to 180 days.

A charge-off means your account is written off as a loss. At this point, the account may be assigned or sold to a debt collection agency. The 澳洲幸运5官方开奖结果体彩网:debt collector can then take action against you to try to get you to pay. That can include calling you to ask for a payment, sending written requests for payment, or even suing you in civil court t▨o try to obtain a judgment.  

When a Collection Agency Steps In

Charge-offs don't end your obligation to repay the debt.

Even if your original creditor no longer owns the account, you'll still owe the debt to the collection agency that acquired it. Charge-offs and other negatives in your account history, such as late or missed payments, can stay on your 澳洲幸运5官方开奖结果体彩网:credit reports for up to seven years.

How to Remove a Charge-Off From Your Credit Rep﷽or𒉰ts

Removing charge-offs or other negative information from your credit reports can be tricky. Technically, accurate negative credit information can legally remain on your credit reports for seven🔜 years, and some types of negative information can stay even longer.

That said, you do have options for dealing with charge-offs. Here are the steps you can take if you find yourself with a charge-off on your credit report:

1. Determine the Details of the Debt

The first thing you need to do is gather all the information about the charg🌌e-off debt.ꦏ Find out how much is owed, how old the debt is, and who currently owns it. Sometimes, debts get sold by the original lender and passed on to a collection agency, and may even be sold again.

2. Inaccuracies? Dispute Them

If, after checking the details of your debt, you find something that’s inaccurate, you may be able to get the debt wiped. Federal law allows you to initiate a dispute with the credit bureau that's reporting information you believe to be inaccurate. The credit bureau then has to investigate your claim, and if there is an error, correct it or remove it.

You can do this yourself, or you can 澳洲幸运5官方开奖结果体彩网:hire a credit repair company to help.

3. Negotiate With the Creditor

If the charged-off account belongs to you and all the information being reported about it is accurate, you could try negotiating with the creditor or debt collector to update or remove the charge-off account from your credit file. Don’t worry if you can't pay the full balance. If an account has been delinquent for some time, the creditor may be willing to accept a settlement in which you pay less than the full amount. Moreover, if the debt passed to another entity, it was probably purchased at a discount.

The option you want to pursue here is called pay-for-delete, which essentially involves asking the creditor or debt collector to remove the account from your credit reports in exchange for a fee. Pay-for-delete arrangements are legal under the 澳洲幸运5官方开奖结果体彩网:Fair Credit Reporting Act, but there are a few things to know. First, creditors aren't obligated to honor your request and remove charge-offs from your credit. So, while you can ask for a pay-for-delete, there's no guarantee that a creditor or debt collector will agree to it. Second, if they do agree, they might demand that you pay the account in full.

Hiring a Credit Repair Company

You can work with a legitimate 澳洲幸运5官方开奖结果体彩网:credit repair company to get charge-offs or other negative information removed from your credit file. While tꦏhis can save time, there's typically a fee involved, and, in most cases, the credit repair company can't do anything for you that you couldn't do by yourself.

And take note: Some credit repair companies are just thinly disguised scams whose only goal is to defraud people who need credit help. Be wary of any credit repair or 澳洲幸运5官方开奖结果体彩网:debt relief company that promises results that seem too 𝕴good to be true.

Even though credit repair companies can't do anything you can't do yourself, they can often be worth the expense in much the same way that a tax professional can be worth the expense.

When Removing a Charge-Off Isn't Possible

If you've tried to negotiate with a creditor to remove a charge-off but hit a dead end, your only option may be to simply wait it out until the seven-year mark passes. Once that period is up, the charge-off will naturally fall off your credit report and no longer be included in your credit score calculations. 

Again, this doesn't mean that you can ignore the debt altogether. You're still legally obligated to pay it. However, the 澳洲幸运5官方开奖结果体彩网:statute of limitations on the debt may expire at some point. When that happens, debt collectors can no longer sue you to recover the money. The statute of limitations for different types of debt varies from state to state.

How to Rebuild Your Credit Rating

As long as the charged-off account appears on your credit repo♈rt, it will continue impairing your credit score.♔ But the good news is that as charge-offs and other negative information age, their overall impact lessens.

In the meantime, you can work on rebuilding a positive credit history by paying your bills on time, keeping your 澳洲幸运5官方开奖结果体彩网:credit utilization ratio low, and limiting how often you apply 💮for new creꦐdit. 

Frequently Asked Questions (FAQs)

The Bottom Line

Charge-offs aren’t pleasant. Having one on your credit report can mean being turned down for credit or borrowing money on very uncompetitive terms. If you find yourself in this situation, don’t bury your head in the sand. There’s a chance you can get it cleared—or at least limit the damage and increase your prospects of being in creditors' good books again relatively soon.