When you’re struggling with debt, you may want to zone out…Don’t do it! Unpaid debt just doesn’t disappear. Not dealing with debt can turn into a charge-off and collection account which can be a double whammy on your credit reports.
A charge-off on a credit report is detrimental to credit scores, especially if it is recent. But how accurate is the information being reported about that charge-off? What is a Credit Charge-Off Banks, lenders and credit card companies will write off an account balance after a certain amount of time of nonpayment. That account balance…
Creditors can choose when to report a charge-off but the remove date of charge offs does not change. It is 7.5 years from the date of last payment.
The Fair Credit Reporting Act Compliance Date determines how long a negative item remains on your credit reports by calculating the original date an account became delinquent – it’s also referred to as the original delinquency date. Make sure outdated information is removed.
Creditors may write-off seriously delinquent accounts in the form of a charge-off but that does not mean you are free and clear from paying the debt.
Creditors that charge-off accounts and sell them to debt collectors must update balance to $0. If the unpaid debt is assigned to a debt collector, the creditor and debt collector can both report the unpaid balance.
Car finance company may have in its contract that a car loan can be charged-off even when making timely payments if the car is destroyed or stolen, or its value substantially depreciates.
Paying less than the minimum payment on credit cards can lead to a charge-off unless you enroll in a credit card hardship program. But getting your credit card company to admit they have one can be a challenge.
Charge-offs hurt your credit scores, whether paid or unpaid. But when applying for a mortgage loan it ‘s better to pay the charge-off so it won’t be factored into your overall credit utlization.