When Will a Charge Off Come Off My Credit Report?

A charge-off is a negative entry placed on your credit report after you fail to pay a debt. The creditor closes the account after in-house collection efforts fail. Charge-offs damage your credit rating and may prevent you from getting approval on loans at reasonable interest rates. Some mortgage companies will not approve your application until all charge-offs are resolved.

Guidelines

The Fair Credit Reporting Act allows for charge-offs to be reported on credit reports for seven years. So-called credit repair clinics advertise that they can remove charge-offs within 30 days. However, the Federal Trade Commission reports that you should avoid such agencies because many are run by scam artists who collect large fees but fail to deliver on their promises.

Paid Charge-Offs

Paying a charge-off doesn't remove it from your credit report unless you make other arrangements as well. Paying the charge-off results in the account being updated on credit reports to show as a "paid charge-off." This usually does not improve your credit score, because the damage was done when the charge-off was initially added to the credit report.

Removal

Charge-offs can be removed by paying the creditor in full and asking that the information be deleted in exchange for the payment. This is called "pay-for-delete," and not all creditors will agree because they feel removing accurate information undermines the credit reporting system. However the option is sometimes available. The only other ethical solution for removing charge-offs is to contact the credit bureau and ask that the information be removed because it is inaccurate. Federal law requires all inaccurate information to be removed from credit reports within 30 days of your notifying the credit bureau by phone, mail or through its website.

Credit Repair

Removing the information entirely could boost your credit score. The keys to high credit scores include paying bills on time, keeping balances low and avoiding negative information being placed on your report. The impact of charge-offs and other negative entries declines with the passage of time. Deleting negative information such as charge-offs speeds up the process.