By the time a charge-off shows up on your credit report, the initial creditor is no longer attempting to collect the loan and they have just written it off as a loss. So it is not at all unpredicted that most individuals do not know what to do about a charge-off, should they go ahead and pay off their contract when they can or not?

A creditor will write off the loan as a loss if they are unable to collect within a precise amount of time. It is more constructive for them to write it off as a loss if they do not think that they will ever be able to collect it. Many times they do refer it to a collection agency however, and this can sometimes lead to duplicate listings on your credit report because the original creditor and the collection agency are both reporting to the credit bureaus even though there is just one account.

A negative credit listing, such as a charge-off is expected to stay on your credit report for a period of 7 years, however that is 7 years from the date of the last activity on the account. So if you pay off an old charge-off to eliminate it from your credit report, it only serves to bring the bad credit forward as the 7-year time period begins again. So it may be more damaging to you to pay if off than it is to leave it alone since the poor credit will be brought forward. This is specially true when you have good new credit that you have been working on.

Regardless of what the situation may be, before you ever pay off any form of older debt, such as a charge-off or a collection account you need to make sure that you get an agreement in writing that as soon as the debt is paid off they will erase it from your credit report. This process is called a “Pay for Delete” and it is really the only way to protect yourself from additional poor credit being reported on your credit report about that account.

Under the Fair Credit Reporting Act or the FCRA, a consumer has a right to dispute any poor listings that are showing on their credit report. That includes any type of listing, such as charge-offs, tax liens, collection accounts, judgments, repossessions, and even foreclosures and bankruptcies. After the credit bureaus get a letter disputing the negative credit they have between 30 and 45 days to either certify the information that they have or delete it from the credit report completely.

Once you begin sending in your dispute letters to repair your credit, it is necessary that you keep meticulous records. Make sure and keep a copy of every letter that you send and also every communication that you obtain in return. The credit bureaus will have 30 to 45 days to authenticate the poor listings and then an added 5 days to respond back to you. It is your duty to follow up with them and make sure that everything is concluded in a timely manner. You must also realize that it may take more than one letter to get results so you will need to make sure that you are unrelenting.

Credit repair can be concluded on your own and you do not necessarily need the help of anyone else, however it can be a complex and prolonged process and you may make a decision that you would prefer to use the services of a professional. It may very well be more cost-effective to do so when you take into consideration the time and knowledge that it takes. Most people already have full-time jobs and full-lives and it may be better to delegate some of the work so that it can be finished in a timely and efficient manner with less disturbance to your own life.

You can get charge-offs and other bad credit listings removed from your credit report. There are just some simple actions necessary for credit repair. You must also start rebuilding and get some good credit on your report that can supersede the bad.

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