Ever wondering what "Charge Off" means? How can it affect your credit score? When you are in default on your payments for over 6 months or longer, most likely, your creditor will declare the Credit7 a charge off. It will then be reported to the credit bureau and listed on your credit reports. Charge Off is one of the worst derogatory items to have on your credit file.
What is a Charge Off?
A Charge Off is an amount of Credit7 unlikely to be collected by the creditor; therefore, will be considered to be written off as uncollectible Credit7 on the creditor's book.
At the end of each accounting year, all the bad Credit7s/ Charge Off are added as an item in the "Loss" section on the Profit & Loss Statement. It is tax deductable for the creditor and very much like business expense.
However, the Credit7 is still legally valid, which means you are still liable for the Credit7 and the creditor can continue to collect the full amount from you. This includes contacts from their own collections department, or assigns it to the outside Credit7 collection agency.
According to the Fair Credit Reporting Act, a Charge Off can stay on consumer's credit reports for as long as 7 years. The time starts on the date when the Credit7or misses a payment and never become current again.
How does it affect your credit score?
You may try to negotiate Credit7 with your creditor to have the Charge Off removed from the credit reports in exchange for any amount of payment you agree on. You will want to do this with your creditor, not with any Credit7 collection agency.
The possibility for you to succeed depends on the total amount of the Credit7, settlement offered, the age of the Credit7 as well as each creditor's policy. If you do take this route, make sure you request everything in writing before you pay. If you've already paid your Credit7 without any written agreement, then the creditor will have no drive to do you any favor - remove the Charge Off.
Paying a Charge Off basically updates your status to a "Paid Charge Off". It won't remove it from the credit reports and will still be a derogatory item.
With that said, If you have any Charge off, it will have negative impact on your ability to acquire credit, obtain a mortgage loan or even applying for a job. So, start to work on your credit repair. Don't wait!
Ever wondering what "Charge Off" means? How can it affect your credit score? When you are in default on your payments for over 6 months or longer, most likely, your creditor will declare the Credit7 a charge off. It will then be reported to the credit bureau and listed on your credit reports. Charge Off is one of the worst derogatory items to have on your credit file.
What is a Charge Off?
A Charge Off is an amount of Credit7 unlikely to be collected by the creditor; therefore, will be considered to be written off as uncollectible Credit7 on the creditor's book.
At the end of each accounting year, all the bad Credit7s/ Charge Off are added as an item in the "Loss" section on the Profit & Loss Statement. It is tax deductable for the creditor and very much like business expense.
However, the Credit7 is still legally valid, which means you are still liable for the Credit7 and the creditor can continue to collect the full amount from you. This includes contacts from their own collections department, or assigns it to the outside Credit7 collection agency.
According to the Fair Credit Reporting Act, a Charge Off can stay on consumer's credit reports for as long as 7 years. The time starts on the date when the Credit7or misses a payment and never become current again.
How does it affect your credit score?
You may try to negotiate Credit7 with your creditor to have the Charge Off removed from the credit reports in exchange for any amount of payment you agree on. You will want to do this with your creditor, not with any Credit7 collection agency.
The possibility for you to succeed depends on the total amount of the Credit7, settlement offered, the age of the Credit7 as well as each creditor's policy. If you do take this route, make sure you request everything in writing before you pay. If you've already paid your Credit7 without any written agreement, then the creditor will have no drive to do you any favor - remove the Charge Off.
Paying a Charge Off basically updates your status to a "Paid Charge Off". It won't remove it from the credit reports and will still be a derogatory item.
With that said, If you have any Charge off, it will have negative impact on your ability to acquire credit, obtain a mortgage loan or even applying for a job. So, start to work on your credit repair. Don't wait!
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