Question: I have a case where someone that I know opened several credit cards under my name and ended up maxing each one out.
There were a lot of late payments and eventually went to collections. I settled the debt with the collection agency but now I have several charge-offs under my credit history. Before all of this happened I had excellent credit but now my score has dropped tremendously.
My question is… are there anything I can do to get the charge offs off my credit or is it something I’ll have to wait years for it to just drop off? Thanks for your time!
Answer: It is unfortunate you did not follow the steps a victim of identity theft would normally take; that way, the fraudulent accounts may have been removed from your credit report with a simple affidavit provided by the Federal Trade Commission. Nevertheless, I understand this was due to someone familiar with you and perhaps you did not want to pursue legal remedies.
Charge-offs can be disputed and if you want to try the dispute route I suggest you read “how to dispute a charge-off.” This will give you some insight on the different facts you can dispute about a charge-off. But there is also some caution that should be exercised in disputing charge-offs. The date of last activity may be updated if the charge-off is verified as accurate by the creditor.
Once the date of last activity is updated, it appears as though recent activity has occurred and recent negative information may lower your credit score as opposed to older negative information. The older negative information such as a charge-off gets, the less affect it has on your credit score.
Another way would be to approach the creditors who put the negative listings on your credit reports. Write a “goodwill letter” explaining the issue and the fact that all of the accounts have been settled with the debt collectors. Also be sure to mention it was a result of someone opening accounts without your knowledge.
Goodwill letters can sometimes work if your situation is sincere. It also works to send the letter to someone in charge, like a vice president or at least a manager. You want the letter to get to someone who has decision making power and can act quickly.
The fact that you settled the collection accounts should work well on your behalf and go a long way in persuading the creditor that the charge-offs were no fault of your own. If you are able to get an agreement to remove the charge-offs, make sure all negotiations are solidified in writing. Without an agreement in writing, you have no proof.
Should you have to wait out the negative listings they will remain on your credit report for seven years, starting with the delinquency that led to your charge-off.
What you can do is make sure there is enough positive information reporting to counteract the negative information. Adding positive credit to your credit reports will go a long way in improving your credit score and getting them back to where they were before the fraudulent activity.
While waiting for the charge-off to age off your credit report, the rebuilding process should be taking place along with paying any current obligations on time and keeping credit card monthly balances to less than 30% of your available credit limit. It will show how well you manage credit and greatly improve your credit history and scores.
Finally, a credit monitoring service, if you do not already have one, can help you avoid a similar occurrence in the future by alerting you of any activity involving your credit files. The best of luck to you.