How to Dispute a Charge Off on Your Credit Report

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How to Dispute a Charge Off on Your Credit Report

Creditors like credit card issuers may list as a way to minimize taxes imposed on them. Such debts are viewed as losses to the company as your account is labeled as not collectible.

Even though the debt is written off as a charge-off, the creditor may still try to recover the loan through third parties. The charge-off will also appear on your credit report and may directly impact your credit score for up to seven years.

The Fair Credit Reporting Act (FCRA) allows you to dispute a charge-off on your credit card, especially if the entry details are inaccurate. Writing letters to the credit reporting agencies will get the process started, and DoNotpay's product can help you with that.

When Does a Charge-Off Show In a Credit Report?

A creditor declares your account as a charge-off after 180 days of no payment, and this record will show up in your credit report right away. For example, in the next credit report, you'll notice that the account is no longer under the "Accounts in Good Standing" section and has moved to the "Negative Items" section.

The will contribute to a low credit score such that you can no longer qualify for a car loan, mortgage, or the best credit cards. In addition, the charge-off will remain on your credit report for seven years, further damaging your credit score.

Even though the creditor has listed the debt as a charge-off, they will continue trying to recover it through third parties. Failure to pay through the third parties will further contribute to a bad credit score as they will have their entries on your credit report.

How to Dispute a Charge-Off on Your Credit Report

Since the creditor reports a charge-off to the three credit reporting agencies – Equifax, Experian, and TransUnion – you'll also need to on all of them. You can dispute a charge off under the following situations.

Multiple Companies Have Listed the DebtThe creditor may have sold the debt to numerous third-party companies to recover the money. It's best to dispute such charge-offs and have each of the companies verify them.
You Are Not Sure of the DebtSome entries result from error, so you may not know of such a debt. However, disputing the charge-off will require the company to verify the debt against you. Also, even though you are sure of the debt, dispute it, and you may have a chance to get off the hook.
If You Notice Errors on the EntryAn error in the details of the debt can be a reasonable basis for the dispute, and it could turn out in your favor.

Once you have enough reason to you will need to write a dispute letter to all three credit reporting agencies and have them work on it. Normally, the bureaus allow creditors up to 30 days to verify the charge-off. If they cannot verify the details entered into the credit report, the charge-off is deleted.

What to Do if You Cannot Dispute a Charge-Off?

If there's no error to the charge-off and your creditor could verify to the bureaus, you may need to find alternative ways like negotiating with your creditor to have it removed from your credit report. Here's how to go about it.

  • Confirm who currently owns the loan as your original creditor may have sold it to a third party.
  • Find out more details about the debt and how much you need to pay.
  • Suggest a settlement amount like 25% as the starting point.
  • Negotiate a pay-to-delete agreement.
  • Ensure that the agreement is in writing.

How to Dispute a Charge-Off on Your Credit Report With the Help of DoNotPay

DoNotPay can help you create a dispute letter that will work. Here's how DoNotPay can help.

  1. Search Clean Credit Report on DoNotPay.

  2. Prepare a recent copy of your credit report that you can use as reference.

  3. 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.

And that's it! DoNotPay will file the appropriate letter on your behalf (mailing is more effective in these cases since it's traceable). You should hear back from the creditor/credit bureau within a few weeks with a response.

What Else Can DoNotPay Do?

DoNotPay can help you learn the following.

Besides credit report issues, DoNotPay can also help you with other services like:

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