Charge Offs - You May Not Have to Pay

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When you get a charge off on your credit report it will negatively impact your credit score. This comes about when an account becomes delinquent and no payment is made for 6 months.

To delete charge offs from your credit history you have to dispute the charge off. You can do this 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.

The Fair Credit Reporting Act was passed by congress in response to incorrect listings being reported. This piece of legislation states that any incorrect or unverifiable listing must be removed by the credit bureaus.

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 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 will continue through any number of collection agencies. It depends upon the size of the delinquent account. You can see how one account can ruin your credit score and turn into multiple negative listings.

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.

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.