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.
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 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.
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.
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 also common for one charge off account to become many negative listings and ruin your credit score. Let me explain what happens to an account once it is charged off.
The charged off debt will be sold to a collection agency by the lender. That collection agency will make efforts to recover payment. If they are unable to then the collection agency makes 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 will continue dependent upon the size of the account. So one account can become many negative listings and ruin your credit score.
If you have many negative listings it will cause your score to go way down. It will also be difficult to get approved for new lines of credit.
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.