If you fail to make payments when a creditor is trying to collect from you, you may end up with a charge off on your credit report.
This is serious business, and shouldn’t be taken lightly. A charge off does not mean the debt has been forgiven.
You’re still liable for it, and it’s going to show up on your credit report. Your debt may eventually be sold to a collections agency, and depending on the amount you may end up being sued over it.
Ignoring a negative mark like this can cause damage to your credit score and block you from taking out loans. Let’s go over what a charge off on your credit report is and how to handle it.
What Does A Charge Off On A Credit Report Mean?
To start, we need to understand what a charge off on your credit report means. In simple terms, the credit report charge off meaning is that you haven’t been making payments, so your account has become delinquent.
Charge offs can happen on accounts ranging from personal loans to your electric bill.
If your accountant was in good standing on your credit report, a charge off will move it into the negative accounts category.
A charge-off account will inevitably be sold to a collections agency, which will move your account into collections on your credit report.
How Long Does A Charge Off Stay On Credit Report?
Much like other derogatory marks, a charge off will stay on your credit report for up to seven years.
Even if you pay it off, the negative mark can linger and your credit score may not improve.
If you don’t think that the charge-off is accurate, you can send in a credit dispute letter. The process can be confusing, so we’re going to break it down for you.
How To Dispute Charge Off Credit Cards With A Letter
Once there’s an account charge off on your credit report, you should be actively trying to get it removed.
If the debt is yours, you’ll need to pay it for it to be removed. If the charge-off is inaccurate, you’ll need to contact the credit bureau directly.
The bad news is you cannot do this by phone, you’ll need to write a dispute letter for the credit charge-off.
When writing a dispute letter, keep in mind that you must have the exact information that you’re looking for.
This can be a long process, and if you’re missing information, the credit bureau is less likely to agree to removing the charge-off from your credit report.
If you don’t dispute it, the only way it won’t show up anymore is if it’s a charge off on credit report after 7 years. Let’s talk about how to dispute a charge-off.
How To Write Dispute Letter To Credit Bureau
Even if you have a paid charge off on your credit report, it will still affect your credit report. It never hurts to try to dispute it.
The first thing you need to do is determine where you’re going to be sending the letter.
For example, you may be sending it to the creditor, or you’re sending the credit dispute letter to collection agency.
The charge-off may still be in the hands of the original creditor, which is good news. This means you may be able to dispute it and settle with them before it goes into collections.
Once the charge-off is in collections, it’s going to result in another derogatory mark on your credit report.
Your letter should be formal and concise. There should only be necessary information.
You can always look at a sample letter to remove items from credit report if you’re unsure of what you should be writing. Before you start writing you should look for violations to dispute by:
- Obtain a credit report from all credit reporting agencies (CRAs)
- Highlight the accounts that have a charge-off
- Find potential violations
- Submit to CRAs
If there are violations, you can submit them to the CRAs to have them removed from your report. If you find a violation, such as an inaccurate late payment you should be able to get it removed.
The letter needs to explicitly state why you are disputing the charge-off, with evidence to back it up. It’s crucial to be as specific as possible.
What To Include In A Credit Report Dispute Letter
When you’re writing your dispute letter, you need to be as detailed as possible. This is why you should obtain your credit report from all three CRA’s before you begin to write.
Your letter needs to note any charge-off reporting violations, along with your personal information. Once you begin your letter, you need to include:
- Full name
- Social Security number
- Date of birth
- Current address
- Copy of identification such as a driver’s license or passport
- Copy of a bank statement or utility bill
Depending on which creditor you are sending the letter to, you may have to fill out a specific form they require. You can also look at a sample letter dispute late payment credit report for help.
How To Send A Dispute Letter To Credit Bureaus
After your credit bureau dispute letter is complete, it’s time to send it. You must find the addresses of each of the credit bureaus, and send the letters individually.
This means sending one to Equifax, Transunion and Experian. If you’re dealing with a collections agency, you will have to contact them as well.
If your charge-off hasn’t gone into collections, you may be able to contact the original creditor and settle to get it removed from your report.
Feeling lost? We can help. Contact Consumer Attorneys today for assistance with a charge-off on your credit report.