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What Are Charge Offs on Credit Reports?
If you have charge offs written on your credit reports then you would have a hard time getting loans. In fact, it would almost be impossible to get a loan.
So what are charge offs? And more importantly, how does one get a charge off to be on his credit report? Let’s say that you have credit cards and for some reason you have missed paying your bill. If you don’t pay your debt in 180 days, creditors would have to consider this a loss. For tax purposes they would have to declare this a charge off.
Now this charge off would appear not only in their records but it will go against you. It will always appear on your credit report from then on up to 7 years. Even though your creditors have already considered your debt a charge off, it doesn’t mean that you no longer have to pay them. You still owe them the amount and most likely some interest charges together with it.
But what about if you pay up after the charge off, you ask? Well, it would still appear in your credit reports. It would be indicated as a “paid charge off” and it still would ruin your chances of obtaining a loan. It would be very hard to delete the charge off but you can try if you want to.
If you really want to erase the charge off before the 7 years is up, you would have to make a request to your creditors or challenge it through the credit bureaus. But first you would have to get the credit bureau to verify your account. And then you would have to negotiate with the collector now handling your account. Plead your situation with him and request that your account be listed as “Paid as Agreed” instead of “Paid Charge Off.” Remember to always keep your communications in writing. This will give you a hold over your agreement should the collector and the creditor agree to let your negative record go. There’s a risk in doing this though. Should negotiations fail your creditors and the collector would have a reason to think that you have the money so they will likely go after you and demand payment. They may take you to court and if you lose in the proceedings there, you would have pay your debt, the interest charges and the legal charges as well.
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