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Charged off debt: A negative item, that lowers credit score.

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Anderson
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Subject: Charged off debt: A negative item, that lowers credit score.
 
 Posted on Thu Jul 03, 2008 12:58 pm  
I found my account charged off in my credit report. Does it mean that I need not repay the debt amount back.
anthony

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 Posted on Thu Jul 03, 2008 1:31 pm  
Any type of credit account, be it credit card or home loans, may be labeled as charged off in your credit report if you have some debt to repay back and more than six months has passed since you made your last payment. If your account has been charged off, it does not necessarily mean that you need not pay back the debt. Instead, you may be sued by the creditor for the amount you owe him.
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Mary

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 Posted on Fri Jul 04, 2008 6:34 am  
Actually if you find your account charged off in your credit report, it does not mean that you are exempted from paying the debt. It is just a negative listing on your credit report which will stay there for seven years. It is always better to pay off the charged off, as after you paid it off, it will show "paid charged off" in your report, which in no doubt better than just showing "charged off" in your report.
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CMBV22

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 Posted on Mon Jul 07, 2008 6:07 am  
it's not a good idea to ever ask do i need to pay it back but,the only way you can not pay it and not get sued is if the debt is past the statute of limitations
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goodnatured



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 Posted on Mon Jul 07, 2008 3:45 pm  
You are right, the statute of limitations is your protection against getting sued.
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scott

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 Posted on Tue Jul 08, 2008 9:46 am  
If you have already a charged off debt, and it got reflected on your credit report, it has two negative effect. FIrstly, it will stay in your CR for seven years and will adversely affect your credit score. Secondly, there is also a chance of getting sued by the creditor which may result into Wage garnishment. If your SOL has expired then it is good because you cannot be sued anymore. But if it has not expired yet, it is better to pay off the dues. Once you pay off the dues the credit report will reflect "paid charge off" as said by Mary. This is no doubt better than "charge off" listing.
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goodnatured



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 Posted on Wed Jul 09, 2008 2:45 am  
Does a "paid in full" help your credit score?
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Mary

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 Posted on Fri Jul 11, 2008 12:01 pm  
Hi goodnatured
"Paid in full" listing does not necessarily improve your credit score. However its impact on your credit score is smaller that if it is listed as "charge off". So it is always better to avoid charge offs by coming to a repayment agreement with the creditor soon as you fall back in your payments. Be it "charge off" or "paid charge off", both has negative impact on your credit score. But "paid charge off" may at least give your creditor a positive outlook of you whenever you are applying for a new line of credit.
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 Posted on Fri Jul 11, 2008 9:23 pm  
true, if they can see past the negative, I guess you could explain your situation better if the accounts are paid.
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erb1953



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 Posted on Sat Jul 12, 2008 1:57 am  
I guess I could see where a possible lender may look more favorably on accounts that were charged off and then paid versus accounts that would be charged off and never paid.
CMBV22

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 Posted on Sun Jul 13, 2008 1:29 am  
You should always try to negociate a pay for delete when paying off debt. At the very least try to get the CA to simply write paid on the account status. a listing thst says paid collections isn't very good for your credit.
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 Posted on Sun Jul 13, 2008 2:41 am  
great idea!
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Mary

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 Posted on Mon Jul 14, 2008 10:42 am  
As far as I know, charge off listing cannot be removed from the credit report. It stays on the credit report for seven years. You can ask the creditor to list your account as "paid as agreed" after you pay off the dues, as any other listing will have negative impact on your credit report. Even "paid charge off" has a negative impact on your credit report. But one should get everything in writing before paying off the dues in full.
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 Posted on Tue Jul 15, 2008 3:06 am  
It does stay on for seven years.
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Justin

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 Posted on Tue Jul 15, 2008 1:52 pm  
Yes Mary is right, charge off listing can never be completely removed from your credit report once it gets listed. So it is always advisable to avoid charge off by all means before it gets listed in your report, as it will stay in your report for seven years and hamper your score. For this one must always come to a repayment agreement with the creditor before the creditor list the charge off in your report.
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