Charge Offs - Do Not Pay

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.

In order to remove charge offs from your credit report you must dispute the listing with the credit bureaus. This is done by sending a credit repair letter to the credit bureaus.

In the credit repair letter you need to include the reason the charge off should be deleted. Reasons often include: the account being paid, never paid laid 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.

Congress passed the Fair Credit Reporting Act in response to complaints of inaccurate information being reported by the credit bureaus. This legislation simply says that if a listing can not be verified then the credit bureau must remove it from your credit report.

It is not un-common for one charged off account to result in many negative listings and a ruined credit report. Let me show you the process of what happens to a charged off account.

The charged off debt will be sold to a collection agency by the lender. That collection agency will make efforts to recover payment. If they are unable to then the collection agency makes a new negative listing on your credit report.

Then the collection agency will turn around and sell your debt to another collection agency. This new collection agency will be able to report a negative listing if they are unsuccessful in collecting payment.

This process will continue through any number of collection agencies. It depends upon the size of the delinquent account. You can see how one account can ruin your credit score and turn into multiple negative listings.

If you have many negative listings it will cause your score to go way down. It will also be difficult to get approved for new lines of credit.

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.