About Credit Charge Off

One gets a charge off after a creditor you have missed your payments, and the creditor gives up on collecting the debt from you. The debts, maybe from; credit cards, loans, and mortgages among others. After you miss your payments for several months, the creditor indicates on your account as charge off. Read on to understand more about charge off and the effects it has on you.

1.You are still responsible for the debt

Even after the creditor marking your account as charged off, you are still required to clear the debt. The creditor or the lender may decide to hire a debt collection agency to collect the money on their behalf. Dealing with debt collecting agency can be hectic since they issue threats until you settle down the debt.

2. Effect on your credit score

When you have a charge off on your account, your credit score will be negatively affected. The credit score will decrease and you will not qualify for loans from banks, mortgages and new credit cards. Therefore, it is important that you pay all your debts to avoid a low credit rating by the lender.

3. Consider other options

If you have a charge off on your accounts, you have different options to help you in settling the debt. First, negotiate with the lender on how you can make partial payments on the bill. Secondly, get a lawyer to advise you and take you through the process.

4. How to remove the charge off from your account

You should start by paying all the debts and then follow up with the credit report bureau. You should inform the lender to remove the charge off and wait for some days until your credit report is updated.

If you have debts that you have not paid for a long time, your accounts will get a charge off. It is important to check your credit reports, settle debts and improve your credit score.