No one likes dealing with debt, let alone a charge-off. Clearly, the worst thing you can do is to avoid it. Interestingly though, most debt gets written off after 7 years. Although, it’s not really worth the risk of simply waiting and hoping for the best. Lenders tend to push as hard as they can to get their money back. This includes potentially taking you to court. Nevertheless don’t despair because you can also work with a credit repair company that can help you sort everything out and get you back on your feet.
What is a Charge-Off?
This refers to the debt that a collection company believes won’t be paid. It essentially escalates the severity of the debt. Then, it is often sold to more specialist collectors who deal with these types of debts, usually through legal proceedings.
To summarize, the key points of a charge-off are as follows:
- Debt that’s unlikely to be collected
- Does not remove the debt
- Major impact on credit history
Essentially, collection companies can get to the point when they realize that you’re not going to pay because you simply can’t. By selling on the debt, they then pass the responsibility of suing you to a company that’s better equipped with this part of the process. As you can imagine, this has a heavy impact on your credit history and overall credit score.
How to Pay a Charge-Off?
Assuming that your debt collector hasn’t sold off your debt yet then there are a few things you can do, as described below:
- Pay in full
- Negotiate “pay for delete”
- Review your credit report
It almost goes without saying that the best way to remove a charge-off is to basically pay everything off in one go. Essentially, a charge-off is one of the most damaging things that can happen to your credit score. Then again if you’ve got to this stage then there’s a chance you can’t pay. If this is the case, then it’s worth talking to a credit repair company and financial advisor. They can help you find the best strategy to move forwards and get out of debt.
In the meantime, you can also negotiate with your lender by proposing to pay off a proportion of your debt. In return, you can ask them to remove negative items from your credit report and therefore fix your credit score. Lenders won’t always agree to this of course. Nevertheless, if you’ve been a good creditor then, you never know, they might consider it.
Another option is to check for any errors with regards to your debt and because these do happen. The best way is to get everything in writing from your lender so that you can check everything. That way you can also verify that the debt hasn’t expired or that it’s a scam. Being the victim of identity theft can quickly lead to these frightening charge-off scenarios. Then again, you can also work with a credit repair company that can do all this for you.
How a Credit Repair Company can Help
- Communicate with the credit bureaus on your behalf
- Negotiate with credit companies
- Manage any legal processes
One of the effects of a charge-off is on your credit score. Therefore, while you’re dealing with your lenders, it’s worth seeing what you can do to save your credit score. Sometimes mistakes happen and your credit score can be worse than it needs to be. Either way, don’t forget to check your credit report when dealing with charge-offs.
There’s nothing stopping you from contacting the credit bureaus directly but most of us quickly get overwhelmed dealing with these things. Not only can it be an emotional time and so our judgment is clouded but it also means dealing with legal terminology that’s not so easy to understand. On the other hand, a credit repair company can manage everything for you, including getting your credit reports, negotiating with credit companies, and generally removing your stress.
If you’ve got to the stage that your lenders are trying to sue you then it’s advisable to work with a credit repair company. The best credit repair companies have legally trained teams who can advise you on your best strategy. Even when everything seems dire, there is always a solution, however small it might seem.
Choosing the Best Credit Repair Company
- Registered according to the Credit Repair Organizations Act
- Better Business Bureau status
- Track record and references
With so many different credit repair companies out there, you might feel stuck as to which way to go. Don’t worry though because it’s easy to check that they are registered with the Department of Justice and therefore bound by the Credit Repair Organizations Act. Another useful website is the Better Business Bureau where you can see any reputable company’s rating. Don’t worry too much about the accreditation part though because that’s not an obligation.
Last but not least, listen to your gut instinct. You need to feel that you can trust the team you decide to work with. Therefore you can ask them about their track record and if you can talk to any references. Another useful data point is their guarantee policy. For example, some of the top companies offer a full 90-day money-back guarantee. This truly shows both their confidence and transparency in their approach.
Final Recommendations for Working with Credit Repair Company to Pay a Charge-Off
A charge-off is one of the worst things that can happen to your credit score so it’s worth paying attention when your lenders warn you it’s coming. Don’t forget that a credit score impacts many aspects of our lives including being able to get a job. So, even if you think you don’t care about your credit history because you’re not planning on getting a mortgage anytime soon, it’s still worth doing what you can to improve your credit score. Don’t panic though because any credit repair company has seen this time and time again and will know exactly what to do.