Can You Legally Remove Charge Offs from Your Credit Reports?

A charge off is a debt that is deemed uncollectible. When a borrower becomes delinquent on a debt, the creditor writes it off, declaring such debt as a loss for the company. These debts are classified as “bad debts” on the creditor’s income statement and are removed from their books. Typically, charge offs occur after 180 days (6 months) of non-payment, but some companies do it much sooner. 

When a debt is charged-off, the account is not considered written off and gone. It will still be collected through a debt collector to whom the debt was sold.  This third party collection agency, as a result, acquires the rights to claim your payments or sue you for the unpaid amount, plus other charges.

A charge-off becomes a concern during times when you would like to make a loan for a project that you need to venture into to improve your current situation. For example, you would like to take out a mortgage for a bigger house for your growing family, or you might urgently need a new car because the old one broke down.

What happens when you have a charge off on your credit report?

Chances are, your application will be rejected. Charge offs stay on your report for seven years. The moment lenders see them on your report, you will automatically be considered high risk, even unacceptable one. For your best interest, you need to get charge offs from your credit report.

But can charge off be taken off your credit report?

Waiting 7 years for the blemish to age off your report, though not advisable, can be a way to do that. But the most popular way to have a charge-off removed from your credit report is to write a dispute letter to the credit bureaus or work directly with the original creditor to negotiate its removal.

There are laws on fair credit reporting, billing and debt collection that borrowers need to know in relation to their debt. These laws can be used by debtors to their advantage, making both the creditor and credit bureau have the charge off removed from your record. To learn more about these laws, brush up the Fair Credit Reporting Act, the Fair Credit Billing Act, the Fair Debt Collection Practices Act and other civil and consumer right laws enforced by the FTC.

Commonly, people also hire credit repair companies and law firms to resolve their credit issues. It may sound a lot of work and time --- You’re right. But with persistence and patience, you may be able to clean up your credit record and keep it that way.

Learn how to remove charge-offs and other negative items from your credit reports by grapping some free credit repair tips at AAACreditGuide.com.