Foreclosure How To Buy

Charge Offs - Do Not Pay

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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.

An effective way of erasing a charge off from you credit history is to dispute the listing. This is accomplished by sending a credit repair letter to the credit bureaus.

In your credit repair letter tell them why the listing should be removed from your credit report. Common reasons are the: the account has been paid, information is wrong, 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.

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 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 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.

The collection agency will then sell your account to another collection agency. The new agency will also try and collect and if unable they will report yet another new negative listing.

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.

With a number of negative listings it will ruin your credit score. This will also make it hard to be approved for any new credit lines.

This is good to know before you pay an outstanding bill because payment does not mean that the listings will be removed. Instead I would recommend disputing the charge off before you take any step to repay the debt.

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