A charge off is a debt that is severely delinquent, where the creditor claims that it has become un-collectable. The account is closed and not active once it is declared a charge off. The creditor at this point is able to write the amount off as a loss on their ledgers, but it remains on your credit report up to seven years. No matter how old (or new) the charge off is, you can work to legally and ethically have it removed from your credit report.
Despite the fact that the debt has been classified as a charge off, the creditor is still interested in collecting what is owed. Usually, they are willing settle for pennies on the dollar at that point. In order to have charge offs removed from your credit report, you first need to order copies of all three credit reports. Then, identify the accounts that are listed in charge off status.
Notify each creditor and ask if they are willing to remove the item off your credit report in exchange for a reduced cash settlement on the debt.
A record number of charge offs have been reported to be removed in the past 18 months as creditors have experienced a rise in delinquencies and bad debts. The key is to know what you are doing when you send them the letter.
If you are wondering if it is worth the time and effort to repair your credit consider this: 2 charge offs can easily reduce your credit score by as much as 190 points! Taking the time to repair your credit report is minimal compared to the money you will save on future interest fees. In addition, removing charge offs will enable you to obtain that new car or credit card you desperately need.