How To Get A Charge-Off Account Off Your Credit Report

A charge off on your credit report leads to a HUGE drop in your credit score. Some experts say that if you remove a recent charge off from your credit report, you can see an INCREASE in your credit score of up to 150 points!

If you don’t know what a charge-off is, it’s what happens when a lender has exhausted all means of collecting the debt from you. Your debt is written off as a loss in the creditors’ accounting book. The creditor will close the account (if they haven’t already done so) and while they report it as a charged-off account to the credit reporting agencies.  They may also sell the account to a collection agency, who will then put this account on your credit report as a collection.  THUS causing your credit score to drop even more.

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Though, the status “Charged off” sounds like you’re getting rid of the debt you owe.  As long as the charge-off isn’t paid, the creditor can continue and try to collect on the account as well as having the right to sue you, until the statute of limitations runs out. By the time your debt is charged off, your credit score has already taken considerable damage.  The account would have been reported as 30 days, then 60 days, 90 days, and more than 120 days late.  And even If you somehow manage to pay off the charge-off, your bad credit score won’t improve if you don’t take a few steps first.

How To Get Charged-off Accounts off Your Credit report?

Recovering your credit score after a charge-off can be complicated but is possible. Here are the top ways to get charged-off accounts off your credit report.

Talk To Your Creditor

The simplest and most straightforward method of having a charged off account removed from your credit report is by talking to the creditor and agreeing to remove the charge off if you can pay the debt . Most of the time they will act like it needs to be paid in full.  But if the debt is old you can start negotiations at less than 50%.  If it’s VERY old (almost ready to fall of the credit report, but you need to get it paid to get your home loan – start off as low as 30% and don’t tell them you are looking for a mortgage!   If they find out you are looking for a mortgage, they will know you MUST pay off the debt to get qualified and they will not settle for anything less than the full amount!  in full.

Once you reach an agreement, get it in writing!  Never send money to a creditor or a collection agency without having the agreement in hand.  Not in the mail.  But in your hand!

Paid For Deletion

When you negotiate, you want to make it clear that you want them to remove the trade line from your credit report.  And you want a Paid for deletion letter. If they don’t have one, you can send them one (we have one on our site)

If you can’t pay the full amount immediately, talk to the creditor and let them know that you are willing to set up a payment schedule.  And you can have the agreed-to amount fully paid by “X” date by making “X” monthly payments in the amount of “X”.  As long as at the end of the payment period they remove their tradeline from your credit report. Get the “Paid for deletion” sample letter here.

Other statuses

Sometimes no matter what, the creditor won’t remove themselves.  You will want them to list themselves at either Paid or Closed.  It’s still a negative mark on your credit report, but it won’t stop you from getting a home loan.

Validate the Charge-Offs

Another way of dealing with charged-off accounts is through the dispute process.  You can start trying to find errors in the way it appears on your credit report. Is it being reported correctly?  Is the amount, date, number of late days correct?  Make sure when you dispute these items that you don’t mistakenly give them the information you don’t want them to know.  For example, you say I didn’t owe them $4,000,  I only owed them $3800!  The lender will just adjust the amount (if they have nothing to prove their $4,000 claim) and use your statement as verification!

That is why, even when we write Paid for deletion letters.  We use the wording “we are not verifying that this debt is ours or that we owe this amount”…..  We do that so that they can’t use the letter as a means of verification.

Just keep in mind that even if the debt gets removed.  It may come back.  If the debt is truly yours and the creditor provides the proof it can be put back on, even if it’s been removed before.  The credit reporting agencies will send you a letter 5 days before the put it back on your credit report, to let you know that the debt has been re-verified

Hire A Professional

Having a charge-off removed from your credit report is a lot of work and effort. If you want the charge off removed without much of a hassle, it’s highly recommended you contact a professional credit repair agency that can have the charge off removed on your behalf. A professional credit repair agency knows how to get the job done and in most cases, they can get a charge off removed much faster and for less money.  Just make sure they have a debt settlement process.

Elizabeth Roberts

Elizabeth Roberts

Liz Roberts and her team are continuously providing information to people who are ready to repair their credit and improve their credit score. Also NewHorizon.org team strives to empower the homebased and small business owners by bringing information that can help them to manage and grow their businesses. Let our 23+ years of business finance experience help you to get the financing you need! CONTACT US if need financing for your business.

6 Comments
  1. I have no credit what would that be called bad poor what? They say I don’t have anything on my credit score at all. Can you help me find an card? Thank you Lynne

    • Hi Lynne,
      They wouldn’t call it either. You just have no credit. The reason it can be difficult at times to get approved when you have no credit is that banks don’t know how you will handle your credit. The credit cards found on this page use a soft inquiry. A soft inquiry is one that will not impact your credit score. They also cater to people with lower credit scores. Which makes it good for people with no credit. The best kind of card I think for a new person to credit is a secured credit card. You have to put down a security deposit, BUT the interest rate is great, they guarantee approval, and you get your security deposit back within a year or 2 of good payment history. You can find secured credit cards here. I suggest the Applied bank because you can add to your deposit over time and make it look like a natural credit limit increase. Hope this helps!

  2. My mother actually hired someone to help her with her debt and they are working on getting the lowered costs for her. This in a way sucks because her phone is always ringing from debt collectors but at least she is only paying a small amount monthly instead of having to pay nearly $800 a month for her debts. Sometimes this isn’t enough though and people file for bankruptcy. I nearly considered it myself but I was able to move back in with my parents to prevent having to do this.

    • Hi Brit,
      Welcome to the group! Your mom should call the consolidation company to let them know she is still getting collection calls. There could be a miscommunication that can lead to one of her creditors continuing to report her debts as late.

  3. Can you recommend a professional credit repair agency? I haven’t a clue where to start.

    • Hi Gini What’s on your credit report? For example is it mostly collection accounts, charged off accounts, bankruptcy? Depending on what it is, I can make a recommendation. Feel free to also send an email to lizr at newhorizon dot org

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    NHBS Inc © 2022

    NewHorizon.org is an independent, advertising supported website. The owner of the site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. NewHorizon.org has not reviewed all available credit card offers in the marketplace.

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