Charge-Offs are one of the most unpredictable and damaging items that appear on Credit Reports. So today, I'm gonna share THREE fast removal methods and give you the best tools to get the job done!
They damage your relationships with lenders, they make it difficult to get approved for lines of credit, and the impact of a Charge-Off depends entirely on your overall credit history, payment history, and additional personal factors.
So there isn't just one foolproof process to remove them.
But there are THREE methods that do work consistently! And all they require are patience, persistence, pressure, and the right Dispute Letters to get the job done!
HERE'S HOW THIS RELATES TO US
For anyone new to Credit Repair, a Charge-Off is a financial term used to describe a debt that a lender has given up trying to collect.
Charge-Offs typically happen when a borrower fails to make payments for an extended period of time, between 120 and 180 days.
But Charge-Offs also happen even when payments are being made. For example, if the payments didn't meet the monthly minimum and the account became delinquent, or the borrower files for bankruptcy.
HERE'S THE THING TO REMEMBER
When a Charge-Off happens, the lender writes off the debt as a loss on their financial statements. Sometimes they attempt to collect the debt themselves, but usually, they sell it to a 3rd-Party Debt Collector for pennies on the dollar, or they lease that debt to a Debt Collection Firm.
But no matter who "owns" the debt, you still have an obligation to repay it even if the original creditor is no longer involved. You owe whoever acquired your debt – even if you remove it from your credit report, it's important to remember that, technically, you still owe that debt, and they can sue you for it.
Now, if you pay off the debt tied to the account before the 7-year clock is up, it will show as a "Paid Charge-Off" on your credit report.
Paying off the account might improve your scores or make lenders more likely to approve you for credit in the future. But that's not guaranteed.
From a credit scoring perspective, what matters most is how recently the Charge-Off happened. And if it was recent, removing the Charge-Off from your Credit Report is a high priority, no matter the repayment status.
HERE'S WHY THIS IS IMPORTANT
Your creditor is paying taxes on the debt that you owe. Your debt is an asset to their company. So when you don't pay, they lose money. And when they are forced to hang on to the debt, they lose even more money.
This is why, in many cases, creditors are willing to negotiate a settlement on a Charged-Off debt, because it is in their best interest to receive some payment rather than none at all.
HERE'S WHAT YOU NEED TO KNOW
It's best to avoid Charge-Offs whenever possible, but if you're stuck with them, there are THREE removal methods that work, and all it takes is patience, persistence, pressure, and the right Dispute Letters to get the job done!
Charge-Off Removal Method #1
Send standard Dispute letters directly to the credit bureaus requesting verification of the debt and the removal of any unverified items or factual errors from the credit report. We call these first letters: ROUND 1Regardless of the type of account, the Bureaus are required to contact the furnisher that reported your information and verify the debt. After contacting the furnishers, they only have 30 days to respond. If they don't respond in time, the items you disputed are deleted automatically. Boom!
Charge-Off Removal Method #2
Challenge the Charge-Off with the original creditor using Section 312 of the Fair and Accurate Credit Transaction Act or send a Validation Letter to the Debt Collector directly, requesting that they prove the debt is accurate.
With both of these two methods, persistence is critical. If the Bureaus or Debt Collectors do not respond appropriately or they respond with a Stall letter, you may need to request a reinvestigation, demand to know their method of verification, or send them a warning letter if necessary.
If you don't already have the Round 1, Validation, Reinvestigation, Method of Verification, and Warning Letters that I'm talking about, you can Download them all for FREE at CreditRepairCloud.com/Dispute-Letter-Templates
I'll end by saying…
If you don't already have a Credit Repair Cloud account, check it out. It's the software that most Credit Repair businesses in America run on. Just sign up for a 30-Day Free Trial at CreditRepairCloud.com/freetrial
And if you'd like to change lives and grow your own credit repair business, check out our Credit Hero Challenge!
It's an amazing program, and we've got another challenge starting in a few days, so grab your spot right now at CreditHeroChallenge.com!
So take care, Credit Hero!
Keep Changing Lives!