What Does Charged Off as Bad Debt Mean?

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What Does 'Charged Off as Bad Debt' Mean?

Keeping a good credit score is important to getting the best loan rates and cheaper insurance costs. If you are new to managing your credit score, understanding technical terms is crucial. Many who are new to understanding credit reports often wonder, "?"

In short, can be severely detrimental to your credit score. Lucky for you, our below guide will tell you everything you need to know about charged-off bad debt. We can even find solutions for you if you have charged off bad debt on your credit file.

What is Charged Off Bad Debt?
  • Charged off bad debt is sometimes also called "write off debt". According to Experian, they are the same thing.
  • Should a debt become severely delinquent, a creditor will want to get it removed from their books.
  • While each creditor has its own distinctions for when a debt becomes severely delinquent, six months without payment is a general standard.
  • For these delinquent debts, a creditor will denote them as "charged off" to get them removed from their balance sheets.
  • In most cases, the creditor will transfer charged off debts to a collection agency.
How Does a Charged Off Debt Affect Your Credit Score?
  • To put it bluntly, charged off debts are very bad for your credit score.
  • Chances are that months of missed payments also hurt your credit score, but a charged off bad debt will hurt it even more.
  • In most cases, a charged off bad debt will stay on your credit file for seven years if action isn't taken.
  • Despite the severity of charged off debts, the Federal Trade Commission (FTC) estimates that 20% of reported charge offs contain some level of errors.
  • No matter the situation of your charged off debt, DoNotPay can help you minimize the damage to your credit score.

How DoNotPay Can Improve Your Credit Score

DoNotPay can help you clean up your credit score in just a few clicks. Use it when:

  1. The Debt is Fully Paid

If you have a fully paid off debt that was marked as charged off, it is possible to get it removed from your credit file early. Instead of waiting seven years for the charged off debt to disappear, you can ask the creditor to remove it early. This is done by submitting a goodwill removal request letter. We can help draft one on your behalf.

  1. There is an Error in your Charge Off

It is fairly common for charge off bad debts to contain some errors. Under FCRA regulations, credit bureaus are required to correct any errors on your credit file. If there's an error on your charge off bad debt, we can help you draft a credit dispute letter. You will need to submit a debt validation request to the collection agency. If you need help, DoNotPay can help you draft a debt validation letter.

Getting started with DoNotPay's Clean Credit Report product

Regardless of your , DoNotPay can help you control the damage in just minutes. Follow these steps to get started.

  1. Search Clean Credit Report on the DoNotPay website.

  2. Create a recent copy of your credit report to serve as a reference.

  3. Select from the four options
  1. If you've already fully paid the charged off debt, we can help you file a goodwill removal request to get it removed from your credit report.

  2. If you notice any errors in your charged off debt, we can help you get errors corrected on your credit score. We have a list of common errors to check for.

  3. If a charge off debt that isn't yours was placed on your credit file, we can help you formally request a debt validation to get it removed.

  4. If you have a legitimate charge off bad debt on your credit file that has yet to be paid off, we can help you submit a pay-to-delete negotiation letter. This letter will open negotiations to possibly reduce the damage to your credit score.

It’s super easy! Just like all the other services offered by DoNotPay.

What else can DoNotPay do?

Try some of our other credit cleaning services, and then see what else you can do with the app.

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