If you have bad credit due to the non-payment of debts, your credit report may contain one or more charge-offs. A charge-off on your credit will reduce your credit score.
Definitions
A charge-off is a debt that has become more than six months delinquent, without payment, according to cardreport.com. To creditors, a charge-off is written off as uncollectable.
Time Frame
According to the Fair Credit Reporting Act, a charge-off will remain on your credit for up to seven years even if it is paid.
Paying Charge-Off
Paying an old charge-off will update the status to a paid charge-off, but it will not remove it from your report. Even though the charge-off status will have been upgraded, it is still derogatory.
Negotiation
Some debtors may negotiate on your behalf to have the charge-off removed from your credit report in exchange for a partial or full payment. If you do this, get the agreement in writing.
Fact
Charge-offs on your credit will affect your credit in a bad way. It may prevent you from obtaining credit cards, loans or charge accounts.
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