By acting swiftly, you can get to the bottom of how the charge-off occurred, plus lessen the toll on your credit.
#CHARGED OFF ACCOUNT FULL#
While you’re at it, request a full accounting of the debt if you don’t already have your own records.
If you don’t know the name of the debt collector, contact your original creditor or lender to gather their contact information. “Otherwise, in order to pay the debt, the person will need to work with the collection agency who is collecting the debt.” “If it’s been a short time since the account was charged off, the consumer may be able to get the original creditor to take the debt back and pay them directly,” says House. (That makes it easier to negotiate a settlement, which we discuss below.) When the debt is charged off, it’s typically “sold off” to a third-party collection agency for less than what you owe. Typically, your creditor will contact you multiple times before it charges off your account as bad debt. This way, you can restore the economic reputation that your credit report broadcasts to other lenders.īecause time is of the essence, let’s get right into an expanded definition of “charged off as bad debt” and what to do if the funky phrase is thrown your way.Īlso known simply as a charge off, it can happen 90 to 180 days after you’ve missed a payment-or haven’t met your minimum payment amount-toward an outstanding balance. “It is important to try and make a plan to pay off negative accounts that (you do) owe.” “Charged off accounts and collections on a credit report will have a negative impact on future borrowing and consumer activities, as well as the credit score,” says Becky House, a former credit counselor and current director of strategic initiatives at American Financial Solutions (AFS), a national nonprofit agency. Acting swiftly can help confirm whether the debt and designation are legitimate, and to minimize the harm to your credit. This ominous phrase means that a creditor believes you won’t be repaying an outstanding balance even though you’re still legally obligated to do so. If you see the words “charged off as bad debt” on your credit report, it’s beneficial to take action sooner rather than later.
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