Tips For Dealing With A Charge Off

Published: Oct 22, 2018

As you should already know, your credit score is far more important than you could ever imagine. If you let it fall into disarray, there is a good chance that it is going to come back and haunt you in the future. The good news is that there are multiple solutions for repairing your credit score and getting your finances back in line. Charge-offs can be very detrimental to your credit score. The good news is that you don’t have to let them linger. There are ways to deal with charge-offs. Within this guide, you’re going to find tips for doing just that.

What Is It?

First and foremost, you should learn about the basics of charge offs. What are they? Well, when you owe a debt, the creditor is going to try to reclaim that money. If they’re unable to do so easily, there is a chance that they’re going to claim that is the debt is irretrievable. When this happens, the creditor will add a charge off to your credit score.

Charge offs

This lets everyone know that the debt is unlikely going to be collected in the future. This usually happens after you’ve failed to make a payment in six months. Be sure to check The Better Credit Blog to learn more about charge offs.

Why It Matters

The truth of the matter is that a lot of people are unaware of the repercussions associated with a poor credit score. If your credit score is in poor shape, you can guarantee that you’re going to have an impossible time getting a loan. At the same time, you might not be able to obtain certain jobs. If you ever want to take out a loan for a business or buy your own home, you need to make sure that your credit score is in good shape. Remember that you can get a free credit score from the three reporting agencies each year.

Reviewing Credit Report

Remember that the charge off might not be yours at all. There is always a chance that someone made an error down the line and you might have someone else’s debt on your credit score. With that being said, you should obtain a copy of your credit report and confirm that the debt is actually yours. If the debt is not yours, you can always take steps to fight it. With a little bit of luck and patience, you’ll be able to get rid of the debt without having to pay for anything. It is always in your best interest to do this. It will save you money and protect your credit score.

Making A Deal

So, would you like to pay off the debt and be done with it? If the answer is yes, you should know that you might not have to pay the full amount. If you’re lucky, there is a possibility that you’ll be able to strike a deal with the creditor. Contact them and see if they’ll allow you to pay less or set up some type of payment plan. Do your best to negotiate and see if you can get a better deal. After all, the creditor would rather have something instead of nothing.

Be Patient

When it comes down to it, some people don’t have the money to pay. If you fit into this category, you’re going to need to remain very patient. As long as you’re willing to wait 7 years, the charge off will be removed from your credit score eventually. Are you really willing to wait that long? This is a question that you’ll need to ask yourself before moving forward. Either way, you need to understand that you have options at your disposal. Never jump at the first opportunity that you find or you might regret it.