How to Get an Original Creditor to Stop Reporting a Charged Off Account

When an account is charged off, it is the equivalent of the creditor giving up on your ability to pay it back. The creditor sells the account to an outside collection agency at a reduced rate, figuring that something is better than nothing. The damage is two-fold -- you burn your bridge with the creditor in question, and you incur serious damage to your credit score. The impact of a charge-off can be felt for up to seven years, during which time all of your other creditors will be aware that you were unable to meet your obligations.

Instructions

1

Pay your debt. You stand no chance of getting your charge-off removed if the debt is still outstanding. Contact the collection agency to get the exact amount you owe, as you may owe additional collection fees. Obtain written proof that your debt is paid in full.

2

Contact the original creditor and notify it that the debt has been paid off. Ask the creditor if it would be willing to remove the charge-off from your credit file. You'll likely have to write a formal appeal letter; get the name and address of the person to contact.

3

Write a letter to the proper person within the creditor's hierarchy asking to change the status of your account from a paid charge-off to an account that is paid in full at the agreed-upon terms. Include reasons why you were unable to pay the first time around and why you feel the determination should be reversed. Await the creditor's response via mail.

4

Check your credit report to make sure the creditor's response is consistent with what is listed on the report. Even if your request to get the charge-off removed was denied, a paid charge-off is looked upon much more favorably than an unpaid one. If the necessary change isn't shown on your credit report, follow up with the creditor and ask why the change wasn't made.