How Much Does a Charge-Off Affect Your Credit Score?
Keeping your credit score as high as possible is essential for many important things in your life, from securing a new rental home to getting a loan for a new vehicle. If you have a charge-off, you may find yourself wondering, how long the impact will last, and how you can improve your credit score again.
If you have a charge-off impacting your credit score, DoNotPay can help you get your credit score back up.
What is a Charge-Off?
when a creditor has tried and failed to get you to make payment on a debt, and has given up trying to receive that payment, closing your account. Generally, a charge-off occurs only when a creditor has spent at least six months waiting for you to make a payment on an open account.
After the first month of nonpayment, the charge will usually move from "accounts in good standing" to "negative items" or "negative accounts." It will update as you continue to not make payments, generally up to 180 days.
After that, the creditor can choose to "charge off" your debt, closing out the account. However, your debt, and the outstanding balance left after you stopped paying, will remain on your credit report.
4 Key Details Regarding Charge-Offs on Your Credit Report
There are several key details on your credit report that you may need to know. See them in the table below.
Even a single charge-off can have a significant impact on your credit report, which may leave you struggling to secure loans in the future.
Can You Remove a Charge-Off From Your Credit Report?
Only the company that originally placed the charge-off on your credit report can remove it. Generally, companies choose to do this relatively rarely, usually as a gesture of goodwill.
You cannot remove a charge-off from your credit report by:
- Paying off the original debt
- Paying off the collections company that purchases the debt
However, there are some strategies you can use to improve your odds of having a charge-off removed from your credit. Generally, you will need to contact the company directly and ask for the gesture of goodwill. You will, in general, have better odds of receiving a goodwill gesture if:
- You present your request to a team member in management, who may have a greater ability to fix your concern
- You have paid off the debt
- You are currently paying other bills to the same creditor in a timely manner
DoNotPay Can Help Clean Up Your Credit Report
Dealing with a challenging report can be difficult. Fortunately, DoNotPay is here to help make the process easier. If you want to clean up your credit report but don't know where to start, DoNotPay has you covered in 3 easy steps:
- Search Clean Credit Report on DoNotPay.
- Prepare a recent copy of your credit report that you can use as reference.
- Let us guide you through the 4 potential options:
- If you've already paid off your debt, we'll help you file a Goodwill Removal Request to get it removed.
- If you notice any errors in your report (we have a list of common errors you can use!), we'll help you file a credit dispute to the creditor or major credit bureaus.
- If there are no errors, we'll check if you're still eligible to file a debt validation request. If they can't validate your debt, they're required to remove it from your report and they can't collect it!
- Lastly, if none of the above options work, we'll help you file a pay-to-delete negotiation letter. You can customize the amount you are willing to pay in exchange for getting the item removed.
You can also check out our other credit products, including Credit Limit Increase, Get My Credit Report, Keep Unused Cards Active, and more!
DoNotPay Can Help with a Variety of Credit Report Challenges
Why use DoNotPay to help clean up your credit report and make everything look like it should again? It's fast, it's easy, and it's convenient. Not only that, it's reliable.
DoNotPay can also help with many of the other credit repair challenges you might be facing, like:
- Learn how to improve your credit score.
- Dispute an inaccuracy on your credit report.
- Receive a debt validation letter.
- Remove collections from your credit report.
- Learn about credit dispute letters.
- Remove late payments from your credit report.
- Fix your credit score.
- Remove inquiries from your credit report.
- And so much more!
Check Out DoNotPay's Credit Repair Tool Today
DoNotPay can help you manage many of your credit repair needs. Check out our credit repair tool today to learn more about how we can help or relieve some of the strain that often goes along with a poor credit report.