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How I Removed Charge-Offs From My Credit Report

Posted By:  |  October 9, 2012  |  39 Comment(s)

Toward the beginning of the recession (2008) I was just setting out on my own and was completely unequipped with the knowledge of how credit works or how greatly it could impact my life. Because of this, I made stupid, uninformed mistakes that cost me a lot of time and stress. You’ll be glad to hear–as I was–that there is hope if you need to do some credit repair of your own due to charge-offs.

But what is a charge-off, exactly? If a creditor is unable to collect payment after a certain period of time (typically 180 days), they will “charge it off” so they can write the debt off as a loss against their income taxes. At this point, the debt is handed over to a collector and the negative words “charge-off” will appear on your credit report, discouraging future lenders from working with you.

Like I said, though, there is hope! Here are three ways I was able to get rid of these ugly words from my credit report and move forward with my life.

1. Request a Goodwill Removal Post-Payment

The first time I noticed a charge-off on my credit report, I panicked. Not knowing what to do, I hastily sent in payment, wrongfully thinking that this would repair my account status. Unfortunately, paying off an account after the charge-off status has already been reported to the credit bureaus does not result in its removal. I decided to call my creditor and politely request that they help me out with my credit repair process. I spoke with a manager (this is important, as regular employees do not have the same decision-making power) and graciously pled my case. In the end, he agreed to send me a “cancellation of debt” letter which I then forwarded to the credit bureaus. Within three months, the charge-off had disappeared from my report.

2. Exchange Payment for Removal

If I had known better the first time around, I would have started off with negotiation techniques before making payment on my charge-offs. This is by far the most effective way for credit repair and resolution. Again, it is very important that when you call your creditor, you speak to a manager. Also be mindful that by the time your account has reached charge-off status, it has probably been handed off to a collection agency. Do not try to negotiate with collections personnel – always contact the creditor directly. I was extremely polite and to-the-point (remember, no one wants to be on the phone with someone who is hostile or who rambles on for ten minutes about their life story). I simply offered to pay the amount in full in exchange for a removal of the charge-off status from my report. The manager agreed to contact the credit bureaus on my behalf to  remove the charge-off status completely, and I agreed to make payment upon receipt of a written, dated, and signed agreement stating that the creditor would, in fact, carry out their end of the bargain. The negative status dropped off my report within a month.

3. Dispute the Charge-Off

One of my most frustrating moments was finding a charge-off on my credit report after never receiving bills or notifications! Mistakes happen, and evidently my creditor either didn’t receive or never logged my change-of-address submission. Because of this, I never received statements or past-due notices and had no idea that I was being sent to collections. Again, I contacted the creditor and spoke with a manager to make payment. I let her know what had happened, and informed her that I would be making the payment now, but would be disputing the charge-off status with the credit bureaus. Because creditors have 30 days to respond to disputes, I requested that she not respond so that the charge-off would be removed. I had her fax me an agreement and once again, the charge-off was gone within a month.

4. Hiring an agency

Between the phone calls, wait times, and  just my impatience to deal with people, I did find it nice to finally place the burden of calling and negotiating in the hands of a capable company.  Credible credit repair agencies are similar to accounting firms: they can do the same thing you can do for yourself, just for a monthly fee. This may be an option if you don’t have time to deal with it, or are just wanting to hand it off to a team of experts.  It can be a good decision. Just make sure it’s with a credible company! Be sure you talk to one of their reps, and get full disclosure on pricing and services provided.

 

 

Best of luck on your journey toward credit repair!

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