How To Clean Up Charge Offs

What are Charge-Offs?

Charge-offs are non-paying loans or credit accounts that have been written off as losses. Merchants report the charge-offs to the credit bureaus.

To recover some costs, merchants typically sell these delinquent accounts to collection agencies. The collection agency pays the merchant a fraction of the value of your debt--usually about half of what you owe.

The collection agency then attempts to collect more than they paid for the account. The merchant no longer has an interest in the debt.

Once you pay a collection agency there is no incentive for the merchant to report your payment to the credit bureau.

If you can pay the entire balance, it is often to your benefit to pay the merchant directly. You can then contact the credit bureau to investigate the negative item. The credit bureau will contact the merchant. With a positive response from the merchant the credit bureau will remove the negative charge-off from your record.

You can often negotiate with a merchant to pay a major portion of your account and have them consider the account paid. Tell the merchant your honest financial situation and that you really want to pay what you can. If the merchant agrees, be sure the have the merchant report your account as "Paid as agreed" to the credit bureaus. Even statements such as "Paid" or "Settled" will go a long way on your credit report.

Even without your effort, charge-offs are typically dropped from credit reports after 6 or 7 years.

Cleaning Up Your Credit Report

A good score helps you get the best loans. The loan officer will be glad to see you because you will:

• Qualify for a larger loan
• Get a loan faster
• Get the best interest rates.

There are basically three ways to clean up your credit report.

• Dispute You can dispute items on your credit report. This may or may not remove the item from your report.
• Negotiate Arrange with your creditor to pay off the debt in exchange for them requesting the credit bureaus to remove the negative item.
• Pay and Wait Pay off the debt and wait (up to 7 years) for the item to be dropped.

In addition, a bankruptcy can remove negative items, but the bankruptcy can remain on your report for 10 years.

For a Powerful One-Time Upgrade of Your Credit Report

Lexington Law is a Law Firm specializing in credit report repair. They have helped over 80,000 Americans improve their credit scores by removing inaccurate, misleading, or unverifiable information from their credit reports.

"It's amazing what a letter from an attorney can do!"

The Lexington Law Firm is member of the online BBB and offers consumers a performance warrantee. From bankruptcies to charge-offs to tax liens, Lexington Law Firm has challenged virtually every credit problem under the sun and deleted over 600,000 such items to date.

Lexington Law's service is backed by a warranty which entitles you to some or all of your money back if enough disputed items aren’t deleted. Put simply, they don’t believe you should have to pay for ineffective service. "If we can’t deliver, you’ll be reimbursed."

Credit Report Scores - Computing Then

Your credit report scores are based on factors that appear in your credit reports:

• Bill payment history (Good: on time and for the full amount)
• Total outstanding debt (Good: non-mortgage loan payments less than 5% of gross income)
• Types of debt (Good: mortgage, car loans, Bad: high credit card debt)
• Length of credit history (Good: 3 or more years of on time payments)
• Credit inqueries (Bad: many rejected applications)

The Equal Credit Opportunity Act (ECOA) prohibits certain factors from being used in determining your credit report score:

• Personal details such as sex, marital status, age, race, national origin, or because you receive public assistance income
• Sources of income such as regular alimony, child support, or separate maintenance payments

The Equal Credit Opportunity Act provides actions for you to take if suspect unauthorized factors are being used to deny you credit.

If you've found this site useful, please link to it so that others can benefit. Use the following in your link:

Link text:	Credit Report Scores - See and Improve Them
Description:	Credit report scores affect your ability to get a loan, buy a home, and even get a job. Find out how to see and improve your score.
Link to:	http://www.credit-report-scores.us