How to Know if a Charge-off Will Be Deleted After Paying It
There are three major credit bureaus: Experian, Equifax and TransUnion. Each bureau maintains its own database of credit information on consumers. If you're late paying a credit obligation more than 150 days, the creditor usually charges off the debt. This means the creditor writes the debt off as a loss on its taxes. The creditor reports the charge-off to the credit bureaus, where it remains on your report for up to seven years. After a charge-off, the creditor still retains the right to collect the charged-off debt. If you have a charge-off on your report, it's wise to understand how to ensure that the creditor removes it once the debt is paid.
Other People Are Reading
Instructions
-
-
1
Call the creditor that charged off the debt. Ask to speak with a person of authority, such as a supervisor or manager. The goal is to speak with someone who has the power to accept a pay-for-deletion offer, which is an offer to pay a debt in exchange for having that debt deleted from your credit report.
-
2
Tell the supervisor that you would like to pay the charged-off debt in full in exchange for the deletion of that charge-off from your credit report.
-
-
3
Verify with the supervisor the exact amount owed on the debt at this time. This is the amount that you need to pay. If you settle the debt or pay less than the full amount, the creditor generally will not agree to remove the charge-off.
-
4
Request the agreement in writing once the creditor accepts your offer. Do not make a payment at this time nor any time prior to receiving the written agreement.
-
5
Send the payment through personal check, cashier's check or U.S. Postal Service money order once you have received the written agreement. Mail the letter certified mail, return receipt requested, and include a copy of the pay-for-deletion agreement.
-
6
Check your credit report after 30 days to ensure that the item has been removed from your report. Most creditors update credit bureau data once a month, but some may do so much sooner. Federal law allows you to order a free credit report once a year from all three credit bureaus at AnnualCreditReport.com, the official site established for such purposes under the Fair and Accurate Credit Transactions Act.
-
7
File a dispute with the credit bureaus if the item remains on your report. Provide a copy of the written agreement as proof. The bureaus have up to 30 days from the date they receive your dispute to investigate and remove the charge-off.
-
1
Tips & Warnings
Instead of contacting the creditor by phone, you can submit your request for a pay-for-deletion through the mail, although it may take longer to receive a response with this method.
If the creditor has sold the charged-off debt to a collection agency, the collection agency will not have the authority to delete the original charged-off account from your credit report. It can delete the collection account associated with that debt. In this case, you will have to pay the collection agency, then contact the original creditor and ask it to remove the original charged-off account. Since the creditor no longer owns the debt, however, it no longer has an incentive to do so and thus may not honor your request.
Federal law does not require creditors to remove accurate information from a credit report. As such, the creditor is not required to accept a pay-for-deletion offer and has the right to refuse your request to remove the item.
