Should I Pay A Charged Off Credit Card Account?
A charge off is probably one of the most complicated credit subjects. So let’s get to it.
What is a charge off?
When a consumer neglects to pay their credit card bill or installment loan the company may decide to charge off the debt. Usually after 120 days of delinquency the credit card company considers the debt to be a loss. For accounting purposes, the company puts the account in the loss instead of the profit column of the books. A charge off on your credit report is extremely damaging to your credit score and may affect your ability to obtain loans and credit in the future. The best solution is to prevent a charge off from occurring but even if it’s too late for that it’s never too late to try to repair your credit report.
What a charge off is NOT:
A charge off doesn’t mean the credit card company has let you off the hook by erasing your debt. Quite the opposite! Now that they have labeled your debt a charge off and reported it to the three major credit bureau’s as such, they are going to try to collect on the debt either in house or they will enlist the help of a collection agency. So now you might have two entities reporting a derogatory mark on your credit report. Sometimes the credit card company will even sue you.
What could happen if you DO pay a charged off account:
You could negotiate with the original creditor, pay the amount in full and get something in writing from them stating that they will ask the three main credit bureaus to remove the negative item from your credit report. There is no guarantee that they will agree to this but it’s worth a shot. What if you don’t have the amount in full? You could try to negotiate a lower payment than the original balance but make sure they don’t mark the account as a “settled debt”. This flags other lenders that you don’t pay your bills in full and you are a credit risk.
If you do pay off the charged off account to a collection agency because the original lender is either unwilling to work with you or they have sold your debt to a third party, you will most likely still have the “charged off” item from the original lender on your credit report for up to seven years.
Unfortunately, calling attention to an old debt (even to pay it) can cause the account to gain prominence in your credit score calculation and lower it further.
What could happen if you DON’T pay a charged off account:
If you don’t pay off a charged off debt it will most definitely be damaging your credit score for up to seven years. If a charged off debt is old, sometimes it is best to let it fall off your credit report according to your State’s statute of limitations (usually seven years). No one wants a bad credit score for any amount of time! Bottom line, if you don’t negotiate with creditors and collection agencies to clear your credit the item will remain.
Like I said in the first sentence, it’s complicated. Some credit problems are time consuming but relatively easy to resolve. This is not one of those problems. It’s recommended that you find a professional to help you. Your credit is too important to ignore and your best efforts could spoil your credit even further.
In this matter, it would be wise to consult a credit repair attorney. Lexington Law Office would be a smart choice.
"I just want to share with you my story about how my credit situation. If you are someone struggling with bad credit, then I was walking in your exact same shoes...
And today - if you look behind me - this is the house that I bought.
So, obviously my credit situation has changed.
Basically, while I was in college I ran up my credit cards and acquired a lot of unmanageable debt which destroyed my credit rating.
About a-year-and-a-half ago when I went to try to buy a house, the banks laughed at me and made me feel bad about what happened in college. (They basically implied that I was a deadbeat SCUMBAG even though it really wasn't all my fault).
I knew that I had to fix my credit, but didn't know how to do it myself so I went to Lexington Law.
Now, literally within several months, I was able to purchase a $300,000 new home without any trouble at all obtaining a mortgage.
So instead of going into banks with bad credit and being looked at as a scumbag, the banks were more than willing to help.
In fact, when I applied for my mortgage and the banker ran my credit, he came back and was saying...
"Wow! Sure thing sir. We'd love to help you out."
Lexington Law literally changed my life.
I went from being the person who has bad credit to being the person who is living in what I consider my dream home at age 29.
I had basically every kind of negative listing shy of a bankruptcy.
Lexington Law has raised my credit score at least 237 points. I just checked my FICO score which is now a 737. When I started with Lexington Law, it was below 500!"
I encourage anyone struggling with bad credit to pick up the phone and give Lexington Law a call.
It was super-encouraging to see my credit score improve each month as the negative items were deleted from my credit reports. I thought some of the bad credit was permanent since creditors misled me into believing that delinquent information would stay on my credit report for the next seven years.
However, through their dispute process and "goodwill interventions," Lexington Law proved it is possible to remove any questionable negative item. (it is the same as pleading 'not guilty' in a court of law).
Additionally, the paralegal assigned to my case showed me other credit rebuilding techniques such as:
Deleting the negative credit items like charge offs and the credit card judgment, combined with the credit rebuilding techniques, rapidly improved my credit score. In fact, in month two my score went up 74 points!
After living with bad credit for so long, it was really encouraging to see that I was making progress in the right direction.
Not only did the attorneys at Lexington Law show me results, they also provided excellent customer service along the way. If you are someone who enjoys that "personal touch", then you may like how Lexington Law assigns a paralegal to your case.
My paralegal (Stephanie) was always available to discuss the status of my case over the phone and email. Even though I didn't expect or ask for it, my attorney would also periodically give me a call to check in.
Here are some strategies Lexington Law used to delete the really stubborn bad credit - such as the credit card judgment:
You can also access you case online anytime you like. (I enjoyed logging in just to see all the deletions!)
If you are struggling with a bad credit score because of negative credit items, then I truly hope that you start repairing your credit today. I know how humiliating bad credit is and I know how easy it is just to 'sweep it under the rug' and pretend it will go away on its own.
I realize that your situation is probably a little different than mine, however, Lexington Law has already deleted questionable charge offs, a credit card judgment, late payments, collection items, and inquiries from my credit report and raised my credit score to a 737!
Here is a shot of my credit score online last month -:
To get started repairing your credit, call Lexington Law today direct at:
1-800-232-2903 (toll-free)
Or, if you want a Lexington Law paralegal to call you, click here.
