When a creditor gives up on obtaining the debt that is owed to them, they will normally list the item as a “charge off” which is essentially a loss in profits and a tax write off.
For example, if you owe a debt to a creditor and you don’t pay the debt back, the creditor will mark it as a charge off when they file their quarterly taxes.
Most of the time collection agencies will buy these debts, also know as charged off debts, and pursue the consumer responsible for paying the debt.
Charge off’s can have a very devastating impact on your credit score.
How a Charge Off affects your credit score
Disputing a charge off account can be very difficult and often times very stressful for the individual doing the disputing. The collection agencies that buy off the debt (charge off) do not have a sympathetic nature in any respect for individuals with a negative charge off listing on their report.
If collection agencies are not able to collect any of the debt in full or partiality, they will make your credit score rating dissolve to essentially nothing. If you do pay off the collection debt, then your credit score will still be negatively impacted, so the best action to take is essentially getting the charge off removed from your credit report for good.
Disputing a charge off on your credit by yourself
Disputing a charge off from your credit and getting it successfully removed is very possible. How probable it is, depends on your situation. Most charge offs are the results of that person going through a tough time or financial struggle, so naturally, their are lots of grey areas when discussing why bad credit exists on a persons reports.
Filing a debt validation, or debt dispute letter (same thing) involves the consumer writing a formal written request to each of the three main bureaus TransUnion, Experian and Equifax. Upon receiving this request, bear in mind these agencies recieve thousands of these on a daily basis, the bureau will decide weather or not your case is legitimate enough to move forward and further investigate the credit items.
The problem for the consumer becomes the time frame in which this process follows. To put it plain and simple, this process takes a few months at best and a large amount of the time the consumer does not end up getting the entries successfully erased.
A simple alternative, and credit solution
Many consumers who try to take care of the mess themselves, will end up turning to professional help to get the results they need for their credit reports.
One of the leading credit repair firms, Lexington law has helped many frusterated consumers remove negative credit and improve their credit scores very effectively.
If you would like to skip ahead of the game and simply sumbit your information into the form below and a paralegal from Lexington will call you for a free no obligation credit consultation.