Can I Work With the Credit Bureau to Remove Charge-Offs?

A charge-off occurs when you do not pay a credit card provider and the company writes off the debt for tax purposes. Credit card companies charge off delinquent account balances after 180 days. The charge-off then appears on your credit report as a negative trade line. Fortunately, in some situations you can work with the credit-reporting bureaus to have the derogatory account removed from your credit files.

Credit Disputes

The credit bureaus will not work with you to remove accurate negative information. If any aspect of the trade line that reflects the charged-off debt is incorrect, however, you have the right to dispute the entry directly with the credit bureaus. The Fair Credit Reporting Act (FCRA) requires the credit bureaus to conduct an investigation into the charge-off's validity and to remove the entry from your credit report if it is incorrect.

Obsolete Charge-Offs

A charge-off should not haunt your credit report forever. The FCRA restricts charge-offs to a seven-year reporting period. This period begins the day your payment to the creditor is 180 days late. Once this period expires, the credit bureaus must remove all evidence of the entry, including any collection accounts that resulted from the charge-off. Unfortunately, not all consumers see derogatory entries removed within the appropriate time frame. If you find an obsolete charge-off in your credit records, you can notify each credit bureau of that fact to have the charge-off removed.

Original Creditor Investigation

The FCRA does not restrict consumers to dealing only with the credit bureaus when correcting reporting errors. As of 2009, you reserve the right to file disputes directly with the information provider. Like the credit bureaus, the information provider will investigate your claim. If it discovers that a charge-off was reported incorrectly, it will tell the credit bureaus to update your credit report with the correct information.

Frivolous Disputes

While federal law requires the credit bureaus to investigate all initial consumer disputes, the FCRA does not require the bureaus to investigate any subsequent disputes you have if the bureaus previously verified that the charge-off on your credit report is accurate. The credit bureaus have the legal right to categorize such disputes as "frivolous" and refuse to acknowledge them.

Legal Recourse

If you cannot correct an erroneous charge-off on your credit report by disputing the trade line with the credit bureaus and the information provider, you can take your case to court. The FCRA allows you to seek legal recourse to correct your credit information by suing the creditor that provided the incorrect information to the credit bureaus and verified it as accurate.