Charge Offs - Do Not Pay
Charge offs are detrimental to a good credit score. They occur when an account becomes delinquent for 6 months.
In order to remove charge offs from your credit report you must dispute the listing with the credit bureaus. This is done by sending a credit repair letter to the credit bureaus.
In your credit repair letter you should explain why the listing is incorrect. For example the account has never been paid late, it’s not your account or information is wrong.
Our credit system is flawed and you are assumed guilty until you can prove otherwise. It is common for incorrect information to show on your credit history.
In response to incorrect information being reported congress passed the Fair Credit Reporting Act. This says that any listing that can not be verified must be removed from your credit report by the credit bureau.
It is not un-common for one charged off account to result in many negative listings and a ruined credit report. Let me show you the process of what happens to a charged off account.
The delinquent debt is sold to a collection agency by the original lender. Then the collection agency tries to collect payment from you. If they can not then they will report a new negative listing on your credit report.
Then this collection agency will sell your debt to another collection agency. The new collection agency will also have the authority to create a negative listing if they can not recover payment.
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.
If you get multiple negative listings your credit will be in bad shape. It will become extremely difficult to get approval for any new lines of credit.
In sum I encourage you to dispute the listing before you make payment. I would do this because making payment does not guarantee the listing will be removed.
Tags: bad credit report, credit counseling
