How to Remove a Charge-Off from Credit

A charged-off account is when a creditor reports your past due account to the Internal Revenue Service as a loss. This happens when there has been no payment on an account for 180 days. The charge-off status is also reported to the credit reporting agencies, which include Transunion, Equifax and Experian. Account information could be reported to all three credit reporting agencies or only one or two. A credit report will be negatively impacted by a charged-off account. Charged-off accounts remain on your credit file for seven years.

Instructions

1

Review a copy of your credit report. See if the seven year time frame has passed. Once seven years has passed, the information should drop from your credit file automatically. If the information remains on your file longer than seven years, you will need to contact the credit reporting agency that reflects that information.

2

Send a letter to the credit reporting agency. Your letter should be sent certified mail and with a return receipt requested. This will serve as proof that you actually sent the letter. Credit reporting agencies have 30 days to investigate and handle your request. When they check the time frame for reporting, they should remove the item right away. The credit reporting agency will send you an updated credit report once the change has been made.

3

Negotiate with the collection agency. Creditors will send charged-off balances to collection agencies for further collection activity. You can negotiate with the collection agency regarding the payment of your balance. As a condition of paying your balance in full, ask the collection agency to remove the charged-off account information from your credit file. If the agency agrees to do this, make sure you receive the arrangements in writing. Many agencies will do this even though the seven-year time frame has not passed.

4

Contact the original creditor. There are cases where your account will be reported to a credit reporting agency twice, once by the original creditor and once by the collection agency. During the negotiating process, you will have to also contact the original creditor, in addition to the collection agency, so that each company can remove the bad credit entry appearing on your credit file. If the original creditor has no record of the account, dispute the information with the credit reporting agency.