Charge-Off Credit Report
A common misconception among consumers is that a charge-off is a good thing. They think that it means the debt has been forgotten or in other words, written off and they no longer owe this money. However, this could not be further from the truth. A charge-off is one of the worst things to happen to your credit report. When a bank or a creditor informs you, your debt is going to be charged-off warning bells must go off in your head and you must do whatever you can to prevent this from happening.
A charge-off usually happens approximately 6 months after you stop payments. This essentially is the point when the banker or creditor writes off your debt as bad debt, and now you will have the record of this debt on your credit report. This is a very bad thing because you’ll have a lot of problems getting credit in the future. However it is important to keep in mind that this is not fatal or an end to your credit standing.
In most cases a banker will inform you that your account is going to be charged-off soon. This is when you must act and avoid this at all costs. You could ask them how much you need to pay to avoid a charge-off. This will usually be only a partial amount of the money you owe. Try your best to make this payment but even if your debt is charged-off, it is not the end.
If this happens you can negotiate with your loaner to remove the charge-off mark from your credit report. Yes, they can make this happen and will do it if you are proactive in your problem and make efforts to pay them back. Remember that a charge-off stay on your credit report for 7 years. You will suffer every time you apply for credit if you do not get this removed.
Avoid negotiations over the phone as usually these conversations are hostile and aggressive. Try writing the loaner a letter explaining the situation and your request of charge-off removal. This gives you the opportunity to list your thoughts in a calm and composed way thus facilitating your goal. This also gives you legal protection and security since you have all the negotiations in writing. You could pay off the debt but do not make any payments unless you have an agreement in writing.