How to Raise a Credit Score With Charge-Offs

A charge-off occurs when a creditor writes off an unpaid balance on a credit account. If this happens to you, it will show up on your credit report, and do serious damage to your credit score. However, the damage is not irreversible. By taking the proper steps, you can build your credit score back up again. This process may take one to three years to produce significant results.

Instructions

1

Order a copy of your credit report from each of the three major credit bureaus (Experian, Equifax and TransUnion). In order to fix your credit, you need to know exactly what your credit reports contain. Each credit bureau puts different information in its credit report. When lenders evaluate your application for financing, they will look at each of your credit reports, so you need to take steps to fix all three. By going over your credit reports, you can also see if they contain any mistakes that may be affecting your score. For example, if you notice an account that you did not open, you can ask the credit bureau to remove it, which can improve your score.

2

Pay off any old balances that are still showing up on your credit reports. If the original creditor has charged off your account and sold the debt to a collection agency, the account may not appear on your credit report any longer. If this is the case, paying the original creditor will do you no good. However, if the credit report still lists a balance, paying off that account can help.

3

Make payments on all of your accounts every month. One of the biggest factors in calculating your credit score is your payment history. If you miss any payments, it can negatively affect your credit. Getting in the habit of paying your bills on time can make a big difference in building your score back up.

4

Keep your credit card balances below 30 percent of the total credit limit. Completely avoiding the use of credit cards is not the best way to build your credit back up. Instead, you need to make periodic purchases with your cards, and try to pay the balances off every month. If you do this, your credit card companies will report positive information to the credit bureaus, which will help to boost your score.