Charge Offs – You May Not Have to Pay
If you have a charge off it will cause your credit score to be lower. A charge off happens when an account is not paid on for 6 months.
An effective way of erasing a charge off from you credit history is to dispute the listing. This is accomplished by sending a credit repair letter to the credit bureaus.
In the credit repair letter you need to include the reason the charge off should be deleted. Reasons often include: the account being paid, never paid laid or it’s not your account.
The way our credit system works is you are guilty until you prove your innocence. What I mean is the incorrect information is true until you prove otherwise.
Congress passed the Fair Credit Reporting Act in response to complaints of inaccurate information being reported by the credit bureaus. This legislation simply says that if a listing can not be verified then the credit bureau must remove it from your credit report.
It is common for one charged off account to turn into numerous negative listings and a bad credit score. I will explain the process of what happens to an account once the lender reports it as a charge off.
The original lender will take the outstanding debt and will sell it to a collection agency. This collection agency will try to collect on the debt. If they are unsuccessful they will be able to create a negative listing on your credit report.
The collection agency will then sell your account to another collection agency. The new agency will also try and collect and if unable they will report yet another new negative listing.
This process can go on and on, depending upon how large the debt is. Thus you can see how one account can turn into many negative listings on your credit report.
With a number of negative listings it will ruin your credit score. This will also make it hard to be approved for any new credit lines.
I recommend disputing the charged off listing before you take steps to pay it. This is because just by paying the charge off does not mean it will remove all the negative listings.
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