How To Handle Charge Offs

Charge offs can take their toll on your credit report. The long-term effects of unpaid bills on your credit reports can last for up to seven years. While it may be tempting to ignore past transgressions, there are proactive ways to approach the dark spots on your credit report. Follow the steps below to properly handle a charge off and minimize the damage.

1. Review

Before dealing with the charge off citation itself, begin by ordering copies of your credit reports from the three major bureaus: Experian, TransUnion, and Equifax. Next, locate the name of the creditor who reported the charge off. (Note that the citation may appear on all three reports.)

2. Validate

It is important to make sure that the charge off listed on your credit report is in fact, yours. Draft a letter to creditors and their third-party collection agencies asking for debt validation in the form of written account statements from your original creditor, outlining:

  • The amount you currently owe
  • A complete payment history
  • Additional calculations such as fees, interest, and penalties
  • A copy of the original agreement or application between yourself and your creditor
  • Documentation that the debt is in fact now owned by any third-party collection agency also reporting the item to the credit bureaus
  • Documentation that any third-party collection agency is bonded to collect in your state of residence
  • Documentation that any collection fees were added pursuant to the original lending agreement

3. Strategize

If the credit companies reporting the charge offs to the credit bureaus are able to validate your debt within 30 days, you will face a fork in the road. You have the option of:

  • Making a deal. The collection agency wants their money, and they may be willing to strike a bargain to get it. Draft a letter asking if they would be willing to delete the charge off citation in exchange for partial or full repayment. If they agree (in writing), send the collection agency a money order or certified check. Make copies of the agreement and the payment for the credit bureaus.


  • Waiting it out. A downside to repaying a charged off account is the risk of additional damage. Reactivating — or “re-aging” as the credit companies term it — an overdue account can cause your credit score to take another hit after the fact. Review your credit score and decide if you can afford to lose points. While charge offs remain on your credit report for up to seven years, weighing the pros and cons of repayment is an important aspect to consider.

Unfortunately, even when following the guidelines outlined here, you may sometimes encounter creditors that are disinterested in preserving your consumer protection rights. That’s where credit repair lawyers may be able to assist with how accounts appear on your credit report.

You can’t undo the past, but you can control how you handle the future. While there may be no clear and simple way to handle a charge off, utilizing the available options is key. Invest some time in cleaning up your credit—you’ll be glad you made the effort.