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Have you recently checked your credit report
and discovered a debt you thought you had paid or are continuing to pay is
labelled "charged off"?
Nothing may be more frustrating, especially when you have
paid the debt.
I had a car loan that was recorded as paid on time for 59
payments but the last payment was recorded as "charged off."
Hmmm... I know I made the payment- it was an automatic
withdrawal from my checking account. Motor Credit knew I made the payment, they
sent me the title. But could I get the credit report entry changed. NO. The
credit agencies said it was their problem. Motor Credit didn't care.
Instead, I am the one who suffers. Because, like
most of the consumer protection laws, the burden is on the consumer to fix the
mistakes. For practical purposes, we are almost at the whim of credit issuing
companies even when they make a mistake.
I never fixed my charge-off entry but I know more than I
did then (at least on this subject). Here is a letter you can use to fix your
charge-off problem. Feel free to copy and make the changes you see fit,
including any changes to tone to match your level of frustration or anger.
The letter won't guarantee results but it has a chance. I
am going to post other letters for dealing with creditors. Many of these
letters as well as tips, strategies, and techniques for dealing with creditors
are in the Road Out of Debt.
Special thanks to the fabulous lawyer, Tim Sherman, for much of this
template. Good luck!
Letter to Fix a Bad Charge-Off Entry on Your
I am writing to you today regarding my credit card
account #__________. The purpose of my correspondence is to respectfully
request a "goodwill adjustment" to my credit report to the three major credit
agencies, specifically to change the "charge off" status to a "current" status.
[Explain the basis for your request, including the
mistake the creditor has made or the reasons for the charge-off status and how
you have rectified them]
I had/have not missed or made a late payment in over [__
months] on this account. [I am current/I can become current on my account]. I
did not learn that your company was reporting this account as a charge off
until just recently. I am in the process of purchasing my first home/ I
am in the process of rebuilding my credit and the "charge off" status is the
major item preventing me from attaining my goal.
Plus, I'm confused why this account is reported as a
charge off [when you are collecting a monthly payment from me]. From my
research, it appears that the Fair Credit Reporting Act does not demand that
all accounts be reported, only that any account that is reported be reported
accurately. Also the Fair Credit Billing Act requires companies to
correct any mistakes. Therefore, I would say that a company such as yours
has the ability if not the obligation to remove "charged off" designation on
credit reports. I would think you would honor this obligation and change
the status to "current."
Thank you in advance for addressing this matter.
[Your name; Address; Account #; Telephone]
articles about consumer debt by Ted Connolly, co-author of The Road Out of Debt
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Nothing crushes a credit score like being charged off. Well... allow me to back up a little; a bankruptcy is worse. In my less responsible days I got a little behind on my bills and was charged off by my call phone provider. My credit score took a hard nose dive after that!
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