What Is a Charge-Off and How Does It Affect a Credit Score

iEditorial Note: These blog posts represent the opinion of DoNotPay’s Writers, but each person’s situation and circumstances vary greatly. As a result, you should make sure to do your own independent research. Because everyone is unique, our self-help tools are never guaranteed to help with any specific situation. DoNotPay is not a law firm and is not licensed to practice law. DoNotPay provides a platform for legal information and self-help.

What Is a Charge-Off and How Does It Affect a Credit Score

Sometimes credit lenders give up hope of borrowers ever paying back a loan. In such a case, the lender may close off your account after several delinquencies in payments when there is no sign of you making good on your debt.

While a charge-off means the lender will not try to reach you any further, it doesn't mean they have wiped the debt off. If anything, the entry might harm your credit report.

can help boost your credit score by 30 points or more. The good news is that DoNotPay can help.

Aside from clearing your credit report of a charge-off, we can also take care of removing collections and inquiries from your credit report. Read on for more details on how we can improve the entirety of your credit history.

An In-Depth Look at a Charge-Off

An is a debt that a lender has given up on collecting after you miss the payment for several months or fail to pay off entirely. A charge-off essentially means that the creditor has, as a last resort, opted to file the debt as a loss and designate it as a charge-off.

However, the critical point to note is that although a creditor won't make any further attempts to reach you for payment, they haven't let you off the hook. As a matter of fact, you're still responsible for paying back what you owe.

A charge-off is considered a derogatory mark on your credit report, and it can stay on your credit report for nearly seven years from the date of your first missed payment. The lender might have submitted your account to a third-party collections agency if your debt was unsecured.

In that case, your account may read as an "account in collections" on your credit report. When this happens, your credit score will drop, which may complicate any future attempts at securing loans or getting competitive interest rates.

How to Dispute a Charge-off on Your Credit Report

As mentioned above, a charge-off lasts seven years from the date of your first diligent payment. As such, if an account charge-off entry remains on your credit report for longer than the seven years, you need to:

  1. Contact a credit bureau
  2. Gather all the necessary information about your debt
  3. Submit your inquiry and wait for a response

The credit bureau will follow up with your creditor to correct the records. The exact process also applies to an inaccurate listing of a charge-off account even after you've paid off your debt. Credit bureaus offer three options to submit your dispute:

  • Mail
  • Online
  • Over the phone

If it is becoming difficult dealing with your creditor, you can reference the Fair Credit Reporting Act or FCRA if any type of malpractice is being committed against you. The FCRA is implemented by the Federal Trade Commission or FTC, state attorneys general, and Consumer Financial Protection Bureau.

You may consult with the CFPB through the contact information below:

CompanyConsumer Financial Protection Bureau
Mailing AddressConsumer Financial Protection Bureau

PO Box 27170

Washington, DC 20038

Phone Number(855) 411-2372
Email or Contact FormAsk CFPB

How to Dispute a Charge-off and Clean Your Report on Your Own?

You can dispute a by:

  1. Download a charge-off dispute form from your preferred credit bureau's website
  2. Fill it out with all your personal information, including your name, address, and phone number
  3. Submitting it via mail, phone, or online

The bureau will contact the data furnisher to check your records and review all data to ensure that its information is correct. If it's incorrect, the furnisher will direct the bureau to update their data or delete the entry from your report.

The investigation process typically takes 30 days. If the furnisher fails to respond to a credit bureau within 30 days, the bureau will delete the account from your reports because it's unverifiable.

Clean Up Your Credit Report Using DoNotPay

Disputing charge-offs to clean your credit report not only gives you peace of mind but also boosts your score and increases your chances of securing loans and credit in the future. However, the process of disputing it can be frustrating, and the wait time too dragging.

Luckily DoNotPay has an alternative solution. DoNotPay has a Clean Credit Report product that essentially lets you clear your name and gets you back on your creditor's good graces. The best part about it is that you can do it in four clicks, and you're done.

Here's how it works:

  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:
  1. If you've already paid off your debt, we'll help you file a Goodwill Removal Request to get it removed.

  2. 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.

  3. 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!

  4. 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.

Why Use DoNotPay?

More and more users are attesting to the effectiveness of DoNotPay’s Clean Credit Report product. You can rest assured that the whole process will be:

  1. Fast: No wasted hours trying to do it yourself. All unnecessary steps are eliminated so the processing time is quicker.
  2. Easy: No more struggling with long and tedious forms. Just send us the required details one time and we’ll do all the paperwork for you.
  3. Successful: Our aim is to provide you with the best possible outcome. You can relax knowing we have your back.

DoNotPay Works Across the Board

Helping you dispute a charge-off and clean your credit report isn't the only thing DoNotPay can help you with. We have several credit-related services we can help you with, including:

What Else Can DoNotPay Do?

DoNotPay is well equipped to help you face several other bureaucracy concerns aside from disputing charge-offs. With DoNotPay, you can:

Join DoNotPay today and enjoy the benefits.

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