When you get a charge off on your credit report it will negatively impact your credit score. This comes about when an account becomes delinquent and no payment is made for 6 months.
An effective way of erasing a charge off from you credit history is to dispute the listing. This is accomplished by sending a credit repair letter to the credit bureaus.
In your dispute letter you should explain why the listing is incorrect. For example the account has never been paid late, it's not your account or information is wrong.
Our credit system is flawed and you are assumed guilty until you can prove otherwise. It is common for incorrect information to show on your credit history.
Congress passed the Fair Credit Reporting Act in response to complaints of inaccurate information being reported by the credit bureaus. This legislation simply says that if a listing can not be verified then the credit bureau must remove it from your credit report.
It is common for one charged off account to turn into numerous negative listings and a bad credit score. I will explain the process of what happens to an account once the lender reports it as a charge off.
The charged off debt will be sold to a collection agency by the lender. That collection agency will make efforts to recover payment. If they are unable to then the collection agency makes a new negative listing on your credit report.
The collection agency will then sell your account to another collection agency. The new agency will also try and collect and if unable they will report yet another new negative listing.
This process will continue through any number of collection agencies. It depends upon the size of the delinquent account. You can see how one account can ruin your credit score and turn into multiple negative listings.
If you get multiple negative listings your credit will be in bad shape. It will become extremely difficult to get approval for any new lines of credit.
This is good to know before you pay an outstanding bill because payment does not mean that the listings will be removed. Instead I would recommend disputing the charge off before you take any step to repay the debt.
To get a free sample dispute letter and more tips to credit repair visit us, or to read an e zine article about what is a charge off.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment