Consumers should check reports for improper charge offs

Toward the end of 2010, nearly every major credit card lender reported big decreases in the number of charge offs they issued on consumer accounts.

Charge offs typically occur when a consumer has left the outstanding account balance unpaid for so long that the company no longer believes it will be reimbursed. As a result, major lenders end up taking the loss and noting the infraction on the individual's credit report.

A charge off, or major delinquency, will usually appear on this document for a period of seven years, affecting a consumer's ability to take out a new loan, credit line or insurance policy at favorable rates. However, in some cases these notices are placed on the credit reports of consumers incorrectly, or linger for far longer than is legally allowed.

Consumers who have experienced this negative action should check their credit reports regularly so they can make sure major lenders are handling this information correctly. Those who find such a mistake can contact a credit repair organization to help investigate and dispute these questionable claims.

By winning a credit dispute, consumers could free themselves from the burden of an improper charge off and see the interest rates they receive on new loans improve.