Charge Offs

Charge offs, correctly reported on a credit report, occur because a company anticipates the debt owed is not collectible. Companies often charge off credit accounts 120 days to 180 days after the first 30 day late payment if no subsequent agreement for payment has been reached. Charge offs are done by companies to offset income in the current time period to more accurately reflect what the company earned.

Charge offs on a credit report impact the credit score significantly. A charge off normally occurs after several consecutive late payments, including 1 or more 30 day late payment and all the way through 60, 90, 120 day late or more. Each step of the way, each late payment shown, damages the credit score. For this reason, by the time the charge off is shown on the credit report the credit score has suffered 50 points, 150 points, or more. A charged off account can remain on your credit report, in most cases, for more than 7 years from the date of first delinquency.

Generally, the best approach to a charged off account is to talk with your creditor before the creditor engages a debt collector which could damage your credit score even more. Typically, a creditor will be willing to work with you if you are willing to work with them. Start with a careful review of the original credit agreement, the account history, payment history, credit report, and circumstances surrounding the charge off. Document your communication in writing and look for a resolution to the charge off.

If you can't come to an agreement with the creditor it is important to note, an account that has been charged off by the creditor does not mean the debt is no longer owed. A true and valid debt is good, typically, for up to 20 years. A creditor has the option of pursuing the debt themselves, often with the help of the courts; coupled with engaging a third party often times a debt collector.

If you have questions about charge offs or how to remove charge offs give Consumer Credit Capital a call: 877-879-1177.