How to Get a Charge-Off Removed From Your Credit Report
Charge-offs occur when you fail to make a credit card payment for 180 days. Once you have a charge-off on your credit history, your options are limited.
Can a Charge-Off Be Removed From a Credit Report?
The best hope for you at this point is that the charge-off has been added in error. Credit card companies do make mistakes, and it’s oftentimes up to cardholders to fix them. If you know that you have made your payments on time, then contact your credit card company to fix the mistakes on your credit report.
If the charge-off was not added in error, then your chances are much lower for getting it removed. If your credit score has been good in other areas and you’ve built up a history of loyalty and timely payments, then you may be able to negotiate with your credit card company to get the charge-off removed, contingent upon your paying the negotiated amount. This is called a “pay for delete” negotiation. This is not guaranteed to work, but arguing that the charge-off was a fluke in your overall credit history will improve your chances.
Credit Card Fraud
Somewhat different from a simple error, you may find a charge-off is the result of identity theft. Bear in mind that, although this has to do with credit cards, it is different from credit card fraud. Imagine someone stealing your personal information and then opening a new credit card in your name.
First, you’ll get a hit to your credit for the hard inquiry. Then, the fraudster will use the new credit card, probably maxing it out if they can. This will drive your credit utilization ratio up, also hurting your score. The worst part, however, is when the charge-off happens. After all, you didn’t even know there was a credit card in your name, and now it’s long overdue. The fraudsters sure aren’t going to pay.
This is exactly why you should monitor your credit score by getting your free report from each bureau once per year. If your credit card or bank offers credit monitoring and your score takes an unexpected dip, check your report to see if everything is accurate. Your best bet, if someone has opened a card in your name, is to dispute your credit report.
Repairing Your Credit After a Charge-Off
Getting hit with a charge-off will do massive damage to your credit score. If you are unable to get it removed, then it’s time to go into recovery mode. The goal now is to repair your credit.
Work on developing good financial habits like budgeting, responsible credit card use, and paying your bills on time. Over time, these good habits will outweigh your charge-off and, after seven years, the charge-off will disappear from your credit history completely.
Charge-offs can be a nightmare if you have one on your credit report. Avoid them by using your credit cards responsibly and paying off your balance in full each month. If you are hit by a charge-off, make sure that it isn’t a mistake. Charge-offs are bad, but it is possible to repair your credit and move forward.
Looking for more information on credit cards and how they work? Visit our credit card resource and learning center for more tips and guides. For more information on the “credit” part of credit cards, visit our credit score resource center.
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A former newspaper journalist, Cole spends his free time reading, writing, playing video games, watching movies, and learning about every subject under the sun. He lives with his wife and daughter in Idaho. Follow Cole on Twitter: @ColeMayer42
This post was updated February 28, 2019. It was originally published March 13, 2018.