How to Remove a Charge-Off From a Credit Report
An extremely delinquent account or "charge-off" on your credit report can significantly damage your credit rating. Charge-offs can hurt your chances of getting new loans and lines of credit at favorable interest rates. Therefore, it's important to keep your credit report as clean as possible and to dispute any errors on your report. The Fair Credit Reporting Act entitles every consumer to an accurate credit report. Here are the steps you can take to dispute inaccurate information from your credit report, including erroneous charge-offs.
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Instructions
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How to Dispute an Inaccurate Charge-Off on Your Credit Report
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Pull all three of your credit reports from Experian, Equifax and TransUnion to see if the charge-off appears on each. You can get these credit reports online and for free by going to the government-sponsored website AnnualCreditReport.com (see Resources).
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Notify each credit bureaus that includes the charge-off on your credit report. You can contact them online or by phone, but the preferred method is via certified mail (return receipt requested) because it leaves a paper trail. Write a letter explaining that the charge-off is inaccurate and should be removed from your report. Include copies of any supporting documentation, such as payment records proving your case.
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Notify the lender or creditor who reported the charge-off. You might find an address to direct disputes on the lender's website. Send a letter explaining the error and include copies of relevant documentation that support your case. (Again, certified mail is the best method of communication.)
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Wait 30 to 45 days, which is the legal time period in which credit bureaus have to investigate your dispute. The credit bureaus will send you a written notice of their results. If they remove the charge-off from your report, they must legally send you a fresh report showing the deletion. If they dismiss your dispute as "frivolous" or say the charge-off is legitimate, you can launch the dispute process again.
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If you are unhappy with the results of the dispute and are unwilling to go through the dispute process again, you can add what's called a "consumer statement" to your credit report. This is a brief statement explaining to potential lenders your belief that the charge-off is inaccurate. The lender may take your statement into account when deciding to loan you money.
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Tips & Warnings
During the dispute process, stay organized. Keep a log of when you sent letters to the credit bureaus and creditors and when they responded. Also keep track of how much time and money you spend trying to resolve the dispute. If the charge-off is not an error (meaning that you were, in fact, delinquent on your account), you cannot dispute it to the credit bureaus. You can choose to pay or settle the charge-off, but neither will remove the charge-off from your credit report (unless you are able to negotiate with the creditor to have it removed). The charge-off will eventually fall off your report in seven years. If it doesn't, you have the legal right to have it removed by contacting the credit bureaus.
If the charge-off is not for an account you recognize, it's possible that someone else opened the account using your name. Contact the lending institution behind the charge-off immediately to inquire about the account and make sure you are not a victim of identity theft.
