So your credit score is in the dumps, and you have a charge-off on your credit report. You must be wondering how to remove a charge-off without paying for it and if it’s even possible.
Well, it can be pretty tricky, but there are a couple of things you can try.
What Is a Charge-Off?
A charge-off is when a creditor writes off your debt as a loss. This usually happens after you’ve missed six months of payments. A charge-off can significantly impact your credit score and make it difficult to get approved for new lines of credit.
It’s important to note that, although the creditor has written off your debt, this doesn’t mean it’s gone. They will likely sell your debt to a collection agency, so you will still be liable to pay it back.
If you need to check if there’s a charge-off on your credit report, visit AnnualCreditReport.com to request your free credit report from the three main CRAs (Experian, Equifax, and TransUnion).
All US citizens are entitled to a free copy of their credit report from CRAs once per year. Once you have your report, check to see if there’s a charge-off listed under “Accounts in Collections.”
So, how long does a charge-off stay on your credit report? Once your account becomes a charge-off, it will remain on your credit report for up to seven years, and there’s not much you can do about it — or so you thought.
How to Remove a Charge-Off
Here are four methods you can try:
Write a Goodwill Letter
Writing a goodwill letter to remove a charge-off from your credit report might be a good idea if you have a history of on-time payments with the creditor.
Goodwill letters are most effective when you have a good excuse:
- You assumed your bill was set up for automatic payment, but this was not the case.
- You changed your bank, and your payment was inadvertently overlooked.
- You moved, and you haven’t received your bills.
- You thought your old debt had been paid off.
- Your ability to pay your bills was temporarily disrupted as a result of a financial crisis.
How to write a letter to remove a charge-off? Here are a few tips:
- Keep it short and to the point: you should include all the relevant information in your letter but make sure it’s short and explain the purpose clearly.
- Be respectful and modest: you’ll want to come across as polite and humble in your letter. Be sure to thank them for their time and express how much you value their business.
- Include supporting documentation: if you have any supporting documentation, include it with your letter. This could include bank statements or payment history.
You can find a sample goodwill letter online.
Dispute the Charge-Off
Another way to remove a charge off from a credit report is to find errors and dispute them. You can do this online (Experian, Equifax, and TransUnion), over the phone, or by mail.
To start the process, you’ll need to gather any documentation that supports your case and then file a dispute with the credit bureau.
When can you dispute a charge off?
- If the debt is not yours
- If you paid off the account before it was charged off
- If the charge-off is more than seven years old.
Negotiate With a Creditor
The next thing you can do is try to negotiate with your creditor (but only if they haven’t sold your debt to the collector yet).
Although this option involves payment, you don’t need to pay anything upfront. You just need to convince the creditor that you will be able to pay off the debt in the future. In this case, they may be willing to remove the charge off on your credit report.
To increase your chances of success, you can:
- Create a payment plan: if you can’t afford to pay off the debt in full, you can try to negotiate a payment plan. This option is usually best for the creditor because it allows them to recoup their losses over time.
- Offer collateral: if you have any assets that you can use as collateral, you may be able to negotiate a lower interest rate or monthly payment.
Make sure you get everything in writing since verbal agreements are not legally binding.
Wait it Out
How to get a charge-off removed after 7 years? Simply wait it out. A charge-off will stay on your credit report for up to seven years and become less impactful as time goes by. After that, it will fall off your report and stop impacting your credit score.
Other Ways to Remove a Charge-Off
There are a few other methods you can try to get rid of a charge-off. However, they come with a price tag.
Write a Pay to Delete Charge-Off Letter
This type of letter is written to ask the creditor if they’d be willing to remove the charge-off in exchange for payment. However, there’s no guarantee the creditor will agree to this arrangement.
To write a pay-to-delete letter, start by requesting that the charge-off be removed from your credit report in exchange for payment. Include the amount you’re willing to pay and the date by which you’ll make the payment.
Mention how paying off the charge-off will benefit the creditor, such as helping them avoid having to write off the debt as a loss.
You can find a letter sample here.
Hire a Credit Repair Company
If all other methods fail, you can always hire a credit repair company to help you deal with the credit card charge off.
A credit repair company will negotiate with your creditors, and they’ll even help you build positive credit. There are many excellent credit repair companies out there, so take your pick.
A charge-off can stay on your credit report for up to seven years, but there are ways to remove it sooner. You can try to negotiate with your creditor, write a goodwill letter, dispute the charge-off, or hire a credit repair company.
No matter what method you choose, keep track of any correspondence and keep copies of everything. This will help you build your case and improve your chances of getting the charge-off removed from your credit report.
Can unpaid charge-offs be removed?
Yes, it’s possible to remove unpaid charge-offs from your credit report. However, you will need to dispute the charge-off with the credit bureau. The credit bureau will check your claim and, if there’s an issue, correct it or remove it.
If there are no errors in your report, you’ll have to negotiate with the creditor. Most creditors will be open to negotiations, especially if you can fully pay the debt. If you can’t pay the debt in full, you may be able to negotiate a settlement for less than what you owe.
What happens if you don’t pay a charged off account?
If you don’t pay a charged off account, the creditor may take legal action against you. The creditor may also sell the debt to a collection agency.
The collection agency will then try to collect the debt from you. This will likely result in multiple phone calls and letters.
The collection agency may also report the debt to the credit bureaus. This will further damage your credit score and make it harder to get approved for loans and credit cards.
How can I get charge-offs off my credit report for free?
There are a few ways to get charge-offs off your credit report for free. You can try to negotiate with the creditor, write a goodwill letter, or wait for it to fall off your report.
You also have the option to file a dispute with the credit bureaus if you believe the charge-off is inaccurate.
Now that you know how to remove a charge-off without paying any fees, you can start working on improving your credit score. Remember, a charge-off will stay on your credit report for up to seven years, so it’s important to take action as soon as possible.