Consider a scenario in which you took an exam and your result followed you for many years thereafter. You’re applying for an apartment, and your landlord looks at your grade. You almost have that great job offer in-hand, but first, your new boss has to check your results. Guess what? The bank has to confirm that you didn’t completely fail before approving you for a mortgage.
Have you imagined all that? Great. Well, it turns out that you don’t need to imagine anything. Your credit score is a measurement of your performance on that test, which is known as your credit report. Your credit report’s contents not only show up on employment and housing applications, but also influence your ability to borrow money and the interest rate you will pay.
One of the nastiest black marks you can receive on your credit report is a charge-off. It demonstrates that you have struggled to repay your debts, and it will harm your credit for years to come. To learn more about charge-offs, read on….
Charge-offs are a permanent reminder of previous financial difficulties that can follow you for years, much like a scarlet letter on your credit report. But is it possible to start over and erase these marks from your credit history? Depending on the details of your charge-off, the answer is both yes and no.
The Difficulty of Removing Accurate Charge-Offs
If the charge-off is accurate, meaning you did indeed fail to repay a debt, removing it from your credit report is an uphill battle. Credit bureaus are understandably cautious about altering information that reflects your true financial history. It’s like trying to convince your teacher to change your failing grade on a test – not an easy feat.
But in the following cases, you may be able to have an accurate charge-off removed:
- Pay for Delete: Some creditors, but not all, may agree to remove a charge-off from your credit report in exchange for partial payment of the debt. This is known as a “Pay for Delete” agreement. While it’s worth attempting, the odds of success are slim, and some creditors may not even consider it.
- Negotiating with the Original Creditor: Contacting the original creditor directly and politely inquiring about their requirements for removing the charge-off is another option. They might be willing to work with you, especially if you demonstrate a genuine commitment to repaying the debt.
Important Disclaimer: OppLoans does not participate in Pay for Delete agreements. For information on how OppLoans handles charge-offs, please refer to their FAQs.
Removing Inaccurate Charge-Offs: A More Realistic Path
Credit bureaus aren’t perfect, and sometimes errors can creep into your credit report If you find an inaccurate charge-off, disputing it directly with the credit bureau is the way to go You’ll need to provide evidence supporting your claim, such as documentation proving you never incurred the debt or that it was already paid off.
For guidance on writing a dispute letter check out this sample from the FTC. You can find more information on this topic in our blog post: “How Do You Contest Errors On Your Credit Report?”
Beware of Credit Repair Scams
Some credit repair companies make enticing promises about removing negative items from your credit report, including charge-offs. However, be wary of these claims. Legitimate credit repair agencies cannot remove accurate information from your credit report. If a company guarantees the removal of truthful charge-offs, they’re likely attempting to deceive you.
The Bottom Line: A Dose of Reality
While removing accurate charge-offs from your credit report is challenging, it’s not impossible. Although they are options, paying for delete agreements and negotiating with creditors are not guaranteed to be successful. Disputing inaccurate charge-offs with the credit bureaus is a more realistic approach.
Remember, credit repair is a marathon, not a sprint. It takes time and effort to improve your credit score. Focus on building positive credit history by paying your bills on time and managing your debt responsibly. This will ultimately have a greater impact on your credit score than trying to erase past mistakes.
What is a charge-off?
A charge-off is what happens when you don’t pay back a debt that you owe. It might be on a credit card or loan, but it might also be on a utility bill or something similar. When a lender charges off a debt, they are writing it off as a loss. The majority of the time, they will just sell it to a debt collector, though occasionally they will try to collect on it themselves. Your creditor then reports the charge-off to the credit bureaus, who mark it down on your credit report.
Depending on the lender, there may be a difference in the amount of time between when a payment is initially due and when the account is charged off, but generally speaking, this is between 90 and 180 days. They will probably report the late payment if you are able to catch up and make payments during that time, which will negatively impact your credit score. If you make the payment before your account is cancelled, you can still prevent the account from being charged off. For specifics on how your account works, please reach out to your lender directly.
Regarding charge-offs, it’s important to clarify that just because the account has been charged off, it doesn’t mean you’re done paying that money. You still do. You will receive a payment request from the creditor or the debt collector who bought the debt. Sometimes they will settle for less than what was initially owed, but if they don’t get their way, they may wind up suing you and garnishing your wages to recoup their losses.
How can an accurate charge-off be removed?
Once a charge-off is on your credit report, it will remain there for seven years. As time passes, it will affect your score less and less, but the damage will still linger. The majority of the information on your credit report is kept there for seven years, but some information—like legitimate bankruptcies, for example—will stay there longer.
It will be very difficult to have the charge-off removed from your credit report if it is valid, meaning that you actually did not repay the debt. You can’t simply ask nicely that the credit bureau remove it. After all, that charge-off is an accurate reflection of your credit history. That would be equivalent to politely requesting that your teacher correct an incorrect exam response.
What you can do is contact your original creditor. You can ask them—very politely—what it would take in order to have the charge-off removed. They’ll probably at the very least ask you to reimburse them for at least some of the money you owe.
In this situation, some creditors may offer a “Pay for Delete” agreement. Bear in mind that some, but not all, creditors allow this type of agreement. If they do, you will be required by the terms of this agreement to pay off a specific portion of your debt in exchange for the creditor removing the charge-off and updating your information with the credit bureaus.
Dealing with your original creditor has a far higher chance of success than dealing with a debt collector. The only party with the ability to have the report removed is the original creditor who submitted it to the credit bureaus. To be clear, there is little chance that your charge-off will be completely removed from your report.
Wed say that it doesn’t hurt to try, but entering a Pay for Delete agreement could violate your creditors contract with the credit bureau, so there are certainly risks. Just make sure that you retain your composure and remain polite during the negotiations. The odds are already long, but a bad attitude can make them much longer.
Disclaimer: OppLoans as a company does not participate in this practice (Pay for Delete). For more information on how OppLoans handles charge-offs, please visit our FAQs.
How To Remove Charge Offs From Credit Report 2024
FAQ
Can charge-offs be deleted from credit report?
How to remove a charge-off from your credit report without paying?
Can credit repair remove negative items?
How do I fix bad credit with charge-offs?
Can a credit repair company remove charge-offs from your credit report?
While some claim to have the ability to remove charge-offs from your credit report, the reality is that the process can be complex and not guaranteed. Legitimate credit repair companies like Credit Saint can help you dispute inaccuracies and errors on your credit report, which may include improperly reported charge-offs.
Can a lender remove a charge-off from your credit report?
Lenders don’t have to remove a charge-off from your credit report, even if you pay them back. That being said, it’s still in your best interest to try and figure out how to remove a charge-off from your credit report. The worst that could happen is your request being denied.
How do I remove a charge-off account from my credit report?
One way to remove a charged-off account is by negotiating a “pay for delete” arrangement with the original creditor. With the pay for delete method, you convince your creditor to remove the charge-off from your credit report in exchange for payment. They may even be willing to report the account as “paid in full.”
Does paying off a charge-off remove it from your credit history?
Unfortunately, paying off a charge-off doesn’t automatically remove it from your credit history. Lenders will still see a charge-off and may not want to lend you money. However, a paid designation is added to your credit report if you pay what you owe in full. Some lenders may see a paid charge-off more favorably than an unpaid charge-off.