Charging off a debt is an accounting move by a creditor that means it is removing the debt from its active accounts. You still owe this debt, and charge-offs have a significant negative effect on your credit rating. Getting these charge-offs removed from your credit report can improve your credit, but the process may require effort and persistence.
Incorrect Information -- Credit Agency
Occasionally, a charge-off or other negative credit report entry that does not belong to you may appear on your credit report. By law, credit reporting agencies must remove any inaccurate information from your credit report, but you must follow the prescribed process to do this. Contact the credit reporting agency by mail and inform it that you believe that the information is inaccurate. You can provide some background information if you wish. The credit reporting agency has 30 days to verify that the information is accurate. If it cannot verify that the information is correct, it must remove the entry.
Incorrect Information -- Original Creditor
If you are certain that a charge-off entry on your credit report is incorrect, but the credit reporting agency is refusing to remove it, you can contact the original creditor. Write to the creditor, using certified mail with a return receipt, and notify the creditor of the inaccuracy. Provide copies of any supporting documents you have, and keep the originals for your records. The original creditor may recognize that the entry is incorrect and remove it. If not, you can sue the creditor, because, if you are correct, the creditor is reporting false information about you that affects your reputation. You may want to contact your state attorney general for assistance as well.
Accurate Information -- Contacting the Creditor
If the entries on your credit report are accurate and you did have a debt that was charged off as a result of non-payment, you need to address this in a different way. You probably will need to pay or settle the debt to have a chance to remove the information. Before you proceed, have money available to either pay the debt in full or to offer a settlement. Contact the original creditor about the debt. You may have to talk with several people to find someone who can help you. The representative may tell you the debt has been sold to another company. If so, you will have to contact the company that purchased the debt.
Paying and Removing
Once you contact someone able to talk about the account, try to negotiate a settlement. Creditors are more likely to settle older debts for less than the balance. When the creditor or collection agent agrees to the settlement amount, you also can negotiate for the removal of the charge-off from your credit report. The creditor may resist, but be persistent. When the creditor agrees to either remove the charge-off or report it as paid -- both of which improve your credit score -- make sure you obtain all agreements in writing.
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