Charge-offs are detrimental to your credit. By the time your account
gets charged off, you’re already 180 days late. After that, the
charge-off listing will remain on your credit report seven years from
the date it was charged off. In total, the account remains delinquent on
your credit report for seven and a half years. That's a long time to
have such a negative entry on your credit report.
Charged-Off Doesn't Mean Forgiven
Don't let the name fool you. You're still responsible for paying a
charge-off. As long as the charge-off remains unpaid, the creditor can
continue attempts to collect on the account and that may include suing
your for the amount.
Future creditors and lenders take charge-offs seriously, so it’s
in your best interest to remove charge-offs from your credit report.
Negotiation is your best tactic for reducing the effects of a
Talk to the Creditor
Often charge-offs are handed to a debt collector. But, when it
comes to charge-offs, you don’t want to deal with a collection agency.
After all, it’s the original creditor who reports a charged-off account
and a collector can’t do anything about what the original creditor
reports to the credit bureaus.
To remove a charge-off, you should contact the original creditor.
You want to convince the creditor to remove the charge-off from your
credit report in exchange for payment. Before you make the call, know
how much you’re able to pay on the account. The more you can pay and the
sooner you can pay it, the more negotiating power you have. Ask to
speak to someone who has the authority to remove the charge-off from
your credit report. Otherwise, you face the risk of getting told "no” by
someone who couldn’t say "yes” if they wanted to.
Let the creditor know you’re interested in paying the account and
would like to make payment arrangements in exchange for having the
charged-off status removed from your credit report. Speak politely and
professionally. Avoid blaming the creditor or giving your life story.
Keep it short and to the point. Best case, the creditor will agree to
remove the charge-off from your credit report
Credit card companies are contractually bound to report credit
information to the credit bureaus, so it can be difficult to get a
creditor to agree to remove the charge-off from your credit report. Even
so, some cardholders have been successful in making a pay for delete
agreement. If you can’t get the creditor to agree to remove the
charge-off completely, try for something less negative like "Closed”.
Get the Agreement in Writing
When the creditor agrees to remove the charge-off from your credit
report, get the agreement in writing. You can do this in one of two
1. Have the person you spoke with fax you a copy of the
agreement on company letterhead.
2. Alternatively, get the name, mailing address, and phone number of
the person you spoke with. Send a copy of your agreement to that person
via certified mail with return receipt requested. Request the person
sign and return a copy to you.