When a Collections Company Calls
March 22nd, 2011 by StaffA charge off is one of the worst things that can appear on a person’s credit report. A debt that has been “charged off” is one that has been deemed uncollectible by a creditor (usually more than 180 days overdue), and therefore written off for the business’ tax purposes.
A valid charge off won’t go away
Even when a debt has been written off by the creditor as uncollectible, that debt is still a legally valid debt and the creditor can continue to try to collect the full amount you owe. Often times, a creditor will turn to a collections agency for help collecting charged off debts.
If and when a collections company calls you, you should do your best to pay off the debt. Having the debt paid off in full looks better than an unpaid, delinquent account to potential lenders.
Keep in mind that just because you paid the debt off doesn’t mean the charge off will disappear from your credit report. In fact, a charge off could appear on your credit report for up to seven years. This is exactly why you should call your creditors when you know you can’t make a payment. Always try to negotiate on due dates and minimum payments when you’re in a tight spot. It doesn’t always work, but it could make a huge difference in your credit score if it does.
Removing incorrect charge offs on your credit report
If you believe that a charge off on your credit report is an error, preparing a legal challenge and forwarding that letter to the collection agency may result in its being removed. Moreover, you can contact all three of the credit bureaus with a dispute letter. Getting an inaccurate charge off removed from your credit report can significantly improve your credit score. If you don’t want to create a creditor intervention or credit bureau dispute yourself, a reputable credit repair service can assist you in disputing an inaccurate charge off.
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