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What can you do about charge-offs on your credit report? Here are some credit repair tips you can use to deal with negative credit including charge-offs.
It is well known that this is considered to be negative credit but what is the best way to handle it? Do I pay off this bad debt? Do I not pay off this bad debt? Well the answer may surprise you as the answer to both questions is "yes"! The term "charge-off" just refers to a debt that the lender was unable to collect on. Many times they will give up trying to collect and refer the bad debt to a collection agency. Often this makes it worse for the consumer as both the original debt owner and the collection agency report the bad credit. This makes 2 negative marks on the credit for just one account. An old charge-off can stay on your credit for as long as 7 years. It is possible to get an old charge-off removed from your credit report but a "paid charge off" is easier to remove than an "unpaid charge-off". However an unpaid charge-off will drop off your report after 7 years but if you pay off the bad debt it will bring it current again and start the 7-year cycle all over again and the bad debt will remain on your credit for an additional 7 years starting from the time you paid it off. It is a catch-22 situation. You have problems either way. So what is the best way to handle this situation? Well before you pay off the old debt make sure that you get an agreement in writing from both the original debt owner and any collection agencies that states that once the debt is paid they will remove it from your credit report immediately. This technique is referred to as a "pay for delete" and it is the best way to pay off an old charge-off. Many people are unaware that they have the right to dispute items showing on their credit report. The Fair Credit Reporting Act states that any consumer can dispute any bad debt on his or her credit report and this includes charge-offs, collection accounts, tax liens, judgments, repossessions and even bankruptcies and foreclosures. You can dispute these items and get them removed yourself or you can hire a professional credit repair agency to assist you. You can dispute items on your credit report by contacting the consumer reporting agencies that are reporting the bad credit. You can call them, write them or even contact them online, however, the best way is to write a formal letter so that you have a paper trail. Make sure that each agency receives the same letter and make sure you keep copies with everything documented. They will have 30 days to investigate so make sure that you document the dates. The credit agencies are supposed to follow up with the original debt owners and the any collection agencies. They are also supposed to look at the public records on your accounts. Make sure that you follow up with them after the 30 days is up to make sure that they are working with you. Credit repair can take awhile but it will take even longer if you are not following up with your own requests. While it is possible to repair your credit on your own a professional credit repair company has developed the knowledge and expertise to expedite the process. Since a professional can do it quicker and easier it may be worth your time to consult with them first to see if they can help you. Karen Lynch is a freelance writer who writes on many subjects including credit repair. You can find more information about repairing your credit at her site CreditExert.com Article Source: Karen Lynch
One of the most damaging items that can be contained on your credit report is a derogatory comment. Most creditors, employers, and landlords will look at the derogatory comments section first when deciding if you are a suitable borrower, employee, or tenant. It is critical that you understand your rights when it comes to these comments. Let's look at each type of derogatory comment and discuss them in terms of damage. The most damaging items will be bankruptcies and foreclosures. A bankruptcy will stay on your record for up to 10 years. Both bankruptcies and foreclosures are the most difficult to have removed. If a service claims that they can remove them it is more likely than not they are making a false claim. Collection accounts are the second most common derogatory item on your credit report. They can stay on your report for up to seven years. As I will discuss later in this article, there are ways to have a derogatory comment related to a collection account removed. The third level of derogatory comments are past due entries. For most people this is because of late payments on credit cards, car loans, or medical bills. These too can be dealt with. Okay, let me share with you a very effective technique to remove these comments from your credit history. Here it is: claim that the debt in question is not yours. You see, the federal law requires that all creditors provide proof that any debt on your credit report is truly yours. That type of proof consists of the contract you signed with the creditor. In reality, most creditors don't have an effective record control where they can provide proof of your original contract. Realize that this won't apply to court records which have effective record keeping in place. This technique applies to business creditors. However, federal law is in your favor. If you make a claim that a debt is not yours and the creditor cannot provide written proof that the debt is yours, then the debt and any items related to it must be removed from your credit report and all collection activity must be stopped. There are many excellent articles on how to file a written dispute. Just understand that once you dispute the item in question the creditor has 30 days in which to respond. If they fail to respond within 30 days, the credit reporting agency has to remove the item. This is a very effective technique in removing damaging items from your credit report -- insisting that the creditors provide proof that the item in question is yours. Take advantage of your rights. Clck here for the FREE "Millionaire Inside" seven part eCourse that describes in detail mental techniques you can use to quickly train your subconscious mind and help you get out of debt quickly Article Source: Phil Craig Credit Report Error Dispute Form |
SAMPLE CHARGE OFF LETTER DISPUTING ERRORS IN YOUR CREDIT REPORT:
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