First of all, there are two types of charge-offs: paid an unpaid. In terms of credit scoring, a paid charge-off is far better than an unpaid one. An unpaid charge-off that has not yet gone to collections, however, could give you an extra option for removal that you wouldn’t have if the debt had already been paid.
Another potential issue with charge-offs is that of multiple charge-offs for the same debt. This issue commonly pops up on credit reports, and it is (in our opinion) the result of anti-consumer policies on the part of the credit bureaus.
Why do we believe this? Because, under certain circumstances the credit bureaus (through the "METRO 2" documentation) instruct creditors to create new account numbers for charged off debt, such as in the case of a debt that is partially charged off. The result of this is that the consumer can end up with multiple charge-offs on their credit report under multiple account numbers, even though they originally only had one account with the creditor.
It is unclear what gives the creditor and the credit bureaus the authority to create new account numbers and multiple accounts for a consumer out of "thin air". It is certainly more damaging to the consumer’s credit score. (That’s probably why they do it that way!)
As a result, the validity of these extra accounts can and should be called into question.
Another thing that has to be considered about charge-offs is how old they are. An older paid charge off, for example, probably has relatively little impact on your credit score.
Believe it or not, because of the user of the "scorecard" system by both FICO and Vantage score, it is perfectly possible that removing a paid charge-off could actually LOWER your score.
So how do you delete charge offs from your credit report?
If there are multiple charge-offs for the same account, you can simply dispute every invalid account as such. If the bureaus and/or creditor fail to respond appropriately, you can follow up with complaints to the BBB, state attorney general, and more.
Remember that it’s important not to copy and paste credit repair letters from the internet or to use ones that you find in a credit repair book. Write your own letters or use a tool like the "Random Dispute Generator" from the Credit Repair Intelligence System.
If you have unpaid charge-offs and have funds available to settle, the best ethical and legal way to remove the charge offs from your credit report is to attempt to settle with the creditor in exchange for removal of the charge offs.
Start with the newest account (which is likely the most damaging) and work your way to the oldest account. The account must not have been placed with collections. If it has, you need to be able to get it sent back to the creditor.
Write the creditor and ask them either to delete the account in exchange for settlement, or at least to not verify the item when you dispute it with the credit bureaus. Always try to get everything in writing.
If they end up not deleting the charge off, it isn’t exactly the end of the world. A paid charge off is better than an unpaid charge off. If they have agreed to do so, persistence may pay off but either way your credit will be better off when the charge offs are paid (whether they are removed or not).