How to Remove a Charge-Off From Your Credit Report
October 18, 2023 | 7 min read
Written By:
Credit Saint
Credit Saint
Staff Writer
With years of experience and a passion for helping clients achieve their financial goals, our team is committed to guiding you on your journey to credit recovery and financial success.
Reviewed By:
Ashley Davison
Ashley Davison
Editor
Ashley is currently the Chief Compliance Officer for Credit Saint, previously the Chief Operating Officer. Ashley got into the Financial world by working as a Logistics Coordinator at Ernst & Young. Coming from a previous career in education, she is eager to teach the world every...
If a charge-off on your credit report is inaccurate, incomplete or can’t be verified, you can dispute it with the credit bureaus, and information that can’t be verified must be corrected or deleted.
If the charge-off is accurate, it can stay for up to seven years. A creditor may agree to remove it as part of a payment deal, but it doesn’t have to.
A charge-off on your credit report can be a serious setback, so it helps to know your options first. This guide explains what a charge-off is, how it affects your credit, how to dispute one, what to try if the debt is valid, and how to rebuild your credit while it ages off.
Key Takeaways
A charge-off means the creditor has written your debt off as a loss. You still owe it, and it may be sold to a collection agency.
A charge-off can stay on your credit report for up to seven years from the date of the first missed payment that led to it.
If a charge-off is inaccurate or can’t be verified, you can dispute it. Bureaus generally have 30 days to investigate, and unverifiable information must be corrected or deleted.
If the charge-off is accurate, you can ask the creditor for a pay-for-delete agreement (it can say no), settle or pay the debt so it shows as paid, or let it age off while you rebuild.
What Is a Charge-Off?
A charge-off is a term creditors use when they consider a debt uncollectible, usually after about six months of missed payments. It means the creditor or lender has given up on collecting the debt itself and has recorded it as a loss on its books.
A charge-off has a significant negative impact on your credit. It appears on your credit report as a major delinquency, which can cause your score to drop. That can make it harder to get approved for new credit or loans, and you may face higher interest rates if you are approved.
The effect is usually strongest when the charge-off is new and fades over time, especially as you add a record of on-time payments.
How Long Does a Charge-Off Stay on Your Credit Report?
A charge-off can stay on your credit report for up to seven years from the date of the first delinquency that led to it. Paying or settling the debt doesn’t restart that clock, and it doesn’t extend it.
Can You Remove a Charge-Off From Your Credit Report?
Sometimes. It depends on whether the charge-off is reported accurately. Start by checking the details, because credit report errors do happen.
1. Get your credit reports
Get copies of your reports from all three major credit bureaus: Equifax, Experian and TransUnion. You can get all three credit reports for free every week at AnnualCreditReport.com.
2. Check the charge-off for errors
Review each report for anything wrong with the charge-off entry, such as:
The date of the first missed payment
The amount owed or the balance reported
The account status (for example, still showing unpaid after you paid it)
An account that isn’t yours, or the same debt listed more than once
3. Dispute anything inaccurate
If you find a discrepancy, you have the right to dispute it with the credit bureaus under the Fair Credit Reporting Act (FCRA). Explain what’s wrong and include copies of any documents that support your dispute.
If you have several charge-offs or other negative items and that’s more work than you have time for, a reputable credit repair company can handle the disputes for you. To see where you stand, start a free credit review.
If the debt is valid and reported correctly, here are options you can try:
Ask for a pay-for-delete: Some creditors may agree to remove the charge-off if you pay the outstanding debt. This is called a “pay-for-delete” agreement. Many creditors won’t agree, and they don’t have to. If one does, get the agreement in writing before you pay.
Negotiate a settlement: Contact the creditor or collection agency and negotiate a settlement. Even if they won’t remove the charge-off, they may agree to update the account to “paid” or “settled” once you resolve the debt, which lenders generally view more favorably than an unpaid balance.
Know the statute of limitations: Each state limits how long you can be sued over a debt, and that clock is separate from credit reporting. After it runs out, you generally can’t be sued, but the charge-off can still stay on your report for seven years. A payment can restart the clock in some states, so check your state’s rules first.
How Can You Rebuild Your Credit After a Charge-Off?
Rebuilding your credit after a charge-off comes down to responsible habits. Pay your bills on time and work on reducing your existing debt. Building a history of on-time payments and low balances matters most.
You might also consider a secured credit card or becoming an authorized user on someone else’s account. It’s a gradual process, but over time these habits can help your credit score and your overall financial standing.
Do Credit Repair Companies Help With Charge-Offs?
Credit repair companies may help with charge-offs, but be careful. Some claim they can remove any charge-off from your credit report. No company can legally remove accurate, verified information.
A reputable credit repair company can help you dispute items you believe are inaccurate, incomplete or unverifiable, which may include charge-offs that are reported incorrectly. Go in with realistic expectations.
Yes, if it’s inaccurate, incomplete or can’t be verified. You can dispute it with the credit bureaus, and information that can’t be verified must be corrected or deleted. An accurate charge-off can stay for up to seven years, though a creditor may agree to remove it as part of a pay-for-delete agreement.
Up to seven years from the date of the first missed payment that led to the charge-off. Paying or settling the debt doesn’t change that date.
Often, yes. You still owe the debt, and a paid or settled charge-off generally looks better to lenders than an unpaid one. Paying doesn’t remove the charge-off by itself, so if you want it removed, ask for a pay-for-delete agreement in writing before you pay. Check your state’s statute of limitations first, since a payment can restart it in some states.
Sometimes. Some creditors and collectors agree to it, but many won’t, and they aren’t required to. If a creditor agrees, get the terms in writing and keep a copy before you send any payment.
A charge-off is the original creditor writing off your debt as a loss. A collection is what happens if that debt is sold or assigned to a collection agency. Both can appear on your report. Learn more about collections on your credit report.
Bottom Line on Removing a Charge-Off
A charge-off is a setback, but it isn’t permanent. Check all three credit reports and dispute anything inaccurate, incomplete or unverifiable. If the charge-off is accurate, you can ask the creditor for a pay-for-delete or a settlement, knowing it can say no.
Meanwhile, pay your other bills on time and keep balances low while the charge-off ages off your report.
Reviewed By:
Ashley Davison
Editor
Ashley is currently the Chief Compliance Officer for Credit Saint, previously the Chief Operating Officer. Ashley got into the Financial world by working as a Logistics Coordinator at Ernst & Young. Coming from a previous career in education, she is eager to teach the world everything she knows and learn everything that she doesn’t! Ashley is a FICO® certified professional, a Board Certified Credit Consultant, a Certified Credit Score Consultant with the Credit Consultants Association of America, UDAAP certified, and holds a Fair Credit Reporting Act (FCRA) Compliance Certificate.
