A charge-off is a serious mark on your credit report that could cause consumers to be denied credit in the future. If you discover this old, unpaid debt in your bad credit history, it is important to settle it as soon as possible. Steve Bucci, president of the Consumer Credit Counseling Service of Southern New England, offers some tips on how to handle the situation.
First, the borrower should get in touch with the original creditor to find out who is collecting the debt, so he or she knows what company to pay directly. Once in contact with the correct person, find out the balance and arrange a payment that you can afford.
It is possible that the charge-off could be removed from your credit report – it never hurts to request this from the lender. However, consumers should get written confirmation of this agreement before sending any payments. If they won't remove it, make sure to check your credit reports to confirm that the charge-off is updated to "paid" status.
If the account is very old and the creditor no longer has access to your account, Bucci suggests writing a short statement to the major credit bureaus saying you have tried to settle the debt, but the lender did not have any information available.