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If you have a charge off on your credit report you need to take action to erase this item immediately, it is a very serious negative mark. Additionally you may end up with more negative credit marks on your report from this debt, if you do not take action to address.

What Is A Charge Off

A charge off occurs most with an unsecured credit card and it will happen after 6 months of missed payments on an account. This means the credit card company write your account off as a tax loss, report a charge off item to the credit bureaus, and sell your debt account to a collection agency.

The collection agency that purchases your debt will begin to contact you trying to collect payment, if they are unable to then they also can report negative information to the credit bureaus about your account. The worst part is this collection agency can legally turn around and sell your account to yet another collection agency who also has the authority to create bad credit on your credit reports.

Clearly you can see how one financial misstep with an unsecured credit card can turn into multiple bad credit items on your credit history. If you think that you only have to live with this bad credit for 7 years, mandated by federal law as maximum amount of time a debt can be on your credit report, think again.

In a recent survey it was found that 74% of all collection agencies ignore federal law and will report your debt account for longer than 7 years. They say with out this ability to ruin an individuals credit report, they would not be able to get consumers to pay the debt off, despite this collection tactic being blatantly illegal.

Your debt account will be sold to different agencies as long as the account is profitable for the debt collectors. This means that the larger your debt, the more times it will be sold to collection agencies and potentially the more bad credit marks you will get on your credit report.

How Do I Remove A Charge Off On My Credit Report

The first thing you need to do is file a credit report dispute with all 3 of the major credit bureaus. The bureaus will conduct an investigation and contact the credit card company to verify the charge off is in fact your account, the balance on this account, and the dates. If any of the information is different then the credit bureau will update your credit report with accurate information.

The most likely scenario is the credit card company will not verify your charge off account and the credit bureaus must remove the charge off item from your credit report. Your charge off account will likely not get verified because the credit card company has probably already taken the debt as a tax loss and sold the collection rights to your account to a collection agency.

Therefore the credit card company has nothing to gain by verifying your account and instead will be spending money on man-hours and resources to verify this information. Very often when the credit bureaus investigate and contact the lender or collection agency if the debt account is no longer held by that particular lender or agency then the account does not get verified and the bureaus have to remove the information on your report.

If you experience any problems or just want someone else to perform the dispute process for you we suggest a credit repair firm, however if you can remain organized and stay persistent you can remove bad credit yourself. Whichever method you choose to move forward take action and remove charge off accounts and any other derogatory items on your credit report.

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