My RV Loan Was Denied Due to a Charge-Off, How Do I Turn This Around?

A charge-off is a serious blemish on your credit report that might keep you from getting certain loans, including RV financing. RVs are expensive, and a charge-off shows the lender that you ignored a previous obligation to a creditor, raising the risk that you might default on new loans. The lender may reconsider financing you, or you might get approval from another finance company, if you get the charge-off removed from your credit reports.

Instructions

1

Contact the lender or credit card company that charged off your account and offer a settlement. A charge-off means the company wrote off the loan as a bad debt on its taxes, although you are still legally liable for the debt. The lender got a tax benefit from the charge-off and was not expecting any further payment, so it is likely to accept less money than you originally owed as a settlement. Offer what you can afford to pay in a lump sum.

2

Ask the lender for an agreement to mark your account "Paid as Agreed" rather than simply reflecting a settled charge-off on your TransUnion, Equifax and Experian credit reports. Settled charge-offs are still negative and will keep you from getting your RV loan. The charge-off needs to be replaced with a paid status that has no negative connotations.

3

Request a written summary of the agreed-on terms for settling your charge off from the creditor. This document should include the amount you will pay and the fact that the credit is accepted it as payment in full for the debt. It should also state that the charge-off will be replaced with "Paid in Full" status on your credit reports, with no indication that the account was delinquent or was settled for less than the full balance.

4

Send the lump-sum payment to the lender, along with a copy of the written agreement. Ask it to change the information on your credit reports immediately because you cannot apply for an RV loan again until the negative information is gone.

5

Order copies of all three of your credit reports through AnnualCreditReport.com, which is run jointly by TransUnion, Equifax and Experian to comply with the federal law that requires them to give you free reports every year. Make sure the charge off is changed to a paid in full account so you can make another RV loan application.