Question:

What is a charge off? Should I bother to pay it? How can I improve my credit score?

by  |  earlier

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My husband and I hit hard times and I got behind on my credit cards, it know shows charge offs on my credit report...what does that mean? Should and should I now bother to pay them? How can I know improve my credit score?

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4 ANSWERS


  1. Dont pay the chargeoff, if it is more than 2 years old, it is not affecting your score.  It could actually lower your score if you pay it by creating a present day "paid collection."  You need to do something else to improve your credit.  Have you considered using one of those authorized user tradeline programs. They are very affordable and would get you well on your way to having better credit. My mom used it and not only was able to open other accounts, but her score jumped 51 points. Check out the free evaluation form at www.totaldebtsolutionsllc.com They can help.


  2. That means the company wrote it off as a loss (they didn't believe that it was worth pursuing).  You can still go back and pay them - you have to contact the company and then follow up to make sure they change it on your credit history to reflect that you have settled the debt.  They are required by law to report the changes to your credit report once you have settled the debt - so make sure to follow up.

    They can still attempt to collect these debts from you also - so if you have the means, I would go ahead and clear these up.  A company often charges off a debt and then hands the debt over at a later time to a third party collection agency.  Companies also sell debts/accounts often - so a purchaser of one of the previously charged off debts can come back and try to collect it in the future.

    There are statute of limitations on debt collection items - but these vary from state to state.

    *Please be advised that this is only my general legal opinion and does not constitute legal advice and/or form an attorney/client relationship.

  3. A charge off is often mistaken for a credit account closure. Many people believe that when creditors threaten to charge off your credit card account, they are just telling you that they are going to close it so that you no longer have the ability to charge on that account. However, the closing of your account happens much sooner after you have failed to pay your bills than a charge-off does.

    When a collection account becomes a charge-off, it means that the creditors you owe money to have been forced by the rules of accounting to zero out the balance that you carry in their books, so that it appears that you have paid off your debt. However, they will not simply forgive your debt and go on as if you have paid the money owed. They will continue to hound you about paying that balance back so that they do not end up losing money on your behalf.

    They will also make you pay not only by getting the money out of you eventually, but by damaging your credit report. When your account becomes a charge-off, your credit score goes down and a substantial black mark goes on your credit report for quite some time. If there is any option you could take rather than having your account charged off or going bankrupt, do it, because your reputation in the world of credit will suffer greatly as a result of these options.

    However, it is not the end of the world if your account is charged off.....Read the full article here:

    http://debt-consolidation.bestmanagement...

    --------------------------------------...

    On how to improve your credit score, the articles in this site will give you the right ideas and strategies:

    http://www.bestmanagementarticles.com/Se...

  4. it means your in collections now. the 1st company, the one you opened it with, decided to take it as a loss since you weren't paying or not paying enough.

    You owe the debt so pay it off.

    Pay your bills

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