Rebuilding Credit With Charge-Offs

When a debt goes unpaid for 180 days, a creditor will list the account as "charged off" on your credit report. Charge-offs are detrimental to your credit score and remain on your credit report for several years. According to Bankrate, a charge-off will appear on a report for seven years and 180 days from the first date of non-payment. Although a charge-off will have a largely negative effect on your credit score, you can minimize the damage and improve your score over time.

Instructions

1

Gather your current debts, including any credit card, retail card or loan. Make a list of every bill, including its due date and minimum payment due.

2

Pay at least the minimum amount due on every bill by the due date. Paying your bills on time will help prevent future charge-offs and improve your overall credit score.

3

Obtain a free copy of your credit report through www.annualcreditreport.com. Complete the required information for each credit bureau and print a copy of all three reports.

4

Review the reports. Make a list of any accurate charge offs, including the original creditor's name and the total amount due. Circle any errors in the report.

5

Write a letter to the credit bureau stating that you dispute the error and provide information as much information as possible. Include a copy of the credit report with the error circled. Repeat this for every error.

6

Send the dispute letters by certified mail to the credit bureaus.

7

Contact the creditor who filed the charge-off. Ask the creditor if the charge-off can be removed from your credit report once the debt is paid. If the creditor does not agree to remove the charge-off, ask that the debt be listed as "paid as agreed." Request that the creditor send a statement listing its intention to remove or alter the debt.

8

Pay the debt in full once you receive the statement.

9

If the creditor does not agree to change the status of the charge off on your credit report, negotiate a settlement amount for the debt and pay that amount in full.

10

If the creditor sold the debt to a third party, obtain the contact information and repeat steps seven through nine.

11

If the creditor does not have contact information for the third party debt collector, write a letter to the credit bureau reporting the charge-off, stating that you were unable to contact the company that owns the debt in order to make payment arrangements. Send the letter by certified mail.

12

Repeat steps seven through 11 for every charge-off listed on your credit report.