Sample Letter to Remove a Charge-Off from Your Credit Report

Charge-offs can devastate your credit score. They appear when you stop paying a creditor for four to six months. Your credit score may drop by 100 points or more.

A poor credit score affects your ability to get loans, buy a house, or even land a job. Creditors view charge-offs as one of the worst marks on your report, second only to bankruptcy.

You can take action to remove charge-offs from your credit report. While no one can guarantee removal, the right approach significantly improves your chances.

What Is a Charge-Off?

A charge-off happens when you stop making payments to your creditor. The creditor waits several months before reporting your account as a charge-off to major credit bureaus.

A charge-off doesn’t erase your debt. You still owe the money. The mark signals to other creditors that you failed to pay according to the agreed terms.

After a charge-off, your creditor may still contact you. They might offer new payment terms or a settlement option. If you don’t respond, they could file a lawsuit or sell your debt to a collector.

How to Find Charge-Offs on Your Credit Report

Your creditor will likely send a letter or email about the charge-off. They’ve probably contacted you for several months trying to collect the debt.

Most creditors give up after six months of attempts. They report your account as a charge-off and reduce collection activity while deciding next steps.

You can get free credit reports from all three bureaus at Annual Credit Report. Review your reports from Experian, Transunion, and Equifax carefully. Note any errors and identify all charge-offs.

Make a list of creditors who charged off your accounts. You’ll need to contact each credit bureau to dispute the charge-off.

How to Dispute Charge-Offs with Credit Bureaus

Two types of charge-offs exist: accurate and inaccurate.

Accurate charge-offs occur when you legitimately stop paying a creditor. The creditor charges off your account and reports it to credit bureaus.

Inaccurate charge-offs happen due to identity theft or creditor error. If you’re a victim of identity theft, dispute the charge-off immediately. Take steps to protect your personal information from criminals.

You can dispute accurate charge-offs too. Write to credit reporting bureaus explaining why they should remove the mark. If you’ve paid your debt in full or settled it, they may remove the negative charge-off.

Building good credit takes time and smart choices. Our partner Kikoff can help you establish positive payment history while you work on removing charge-offs.

What to Include in Your Charge-Off Dispute Letter

Include your personal information and details about the charge-off in your letter. Provide evidence proving the charge-off is inaccurate if you have it. Give the credit bureau clear information about your debt, including the creditor’s name and account number.

Most credit bureaus require proof of identity. You’ll need a copy of government-issued ID like your driver’s license or passport. Include a copy of a recent utility bill or bank statement too.

Here’s a standard template for requesting charge-off removal:

Send a letter to each credit bureau that reports the charge-off you’re disputing.

When Will Credit Bureaus Remove the Charge-Off?

Each credit bureau follows a specific process for disputes. They’ll review your letter and evidence. Next, they contact your creditor for their side of the story. The bureau decides based on information from both parties.

By law, credit bureaus must complete their investigation within 30 days. They may request more details if they need additional information.

If the bureau finds the charge-off legitimate, they’ll provide proof of their decision. If they can’t prove the charge-off is accurate, they must delete it from your report.

You’ll have a stronger case if you provide clear evidence. A note from your creditor agreeing to delete the charge-off in exchange for payment works best.

Should You Pay a Charged-Off Account?

A charge-off negatively impacts your credit score for several years. Getting new credit during that time becomes difficult.

You can close the issue by paying off your account or arranging a settlement. Your creditor can no longer pursue legal action. The charge-off won’t impact you as much since you’ve settled the obligation.

Ignoring the charge-off won’t make it disappear. Your creditors can still pursue payment and may take legal action. A lawsuit can enable them to garnish your wages or seize your property.

Can You Negotiate a Charge-Off Removal?

Yes, you can negotiate a charge-off removal with your creditor. Ask if they’ll delete the charge-off in exchange for payment of the obligation.

Creditors aren’t obligated to remove your charge-off, even after payment. They don’t have to accept your offer.

If negotiation succeeds, get the agreement in writing. Ask the creditor to draft a letter stating they’ll delete the charge-off with all three credit bureaus in exchange for payment. Keep a copy in case they don’t fulfill their promise.

If the creditor agrees to remove the charge-off, wait two months and pull your credit report from all three bureaus. If the charge-off still appears, file a dispute with a copy of the creditor’s agreement letter.

Removing Charge-Offs Starts Your Credit Repair Journey

Monitoring your credit report protects your financial health. Errors can alert you to potential identity theft and other illegal activity.

Removing accurate charge-offs from your credit report takes effort. The work is worth it. A clean credit report vastly improves your credit score and makes future loans easier to obtain.

Follow the guide above and take appropriate steps. Your credit score will thank you.

What Happens When Charge-Offs Go to Collections

When your account is charged off, it often gets sent to collections. Debt collectors will contact you about the debt. Ignoring them can lead to a lawsuit.

If you’ve been sued for a debt, you must respond to the lawsuit. Failing to respond means you lose automatically. You risk wage garnishment and property seizure.

Our partner Solo helps you respond to debt collection lawsuits quickly. Responding properly increases your chances of winning significantly.