When an account is unpaid for more than 180 days, a creditor usually writes off the debt as a loss on their financial statements. This is known as a charge off. Once a debt is charged off, it is either transferred to an in-house collections department or sold to a third-party collection agency who will likely contact you in attempt to recoup the balance.
In addition to annoying creditor calls, a charge off may be bad news for your credit report. Not only will it likely remain in your file for up to seven years, it may significantly affect your credit score as well. In response to a lower credit score, your current creditors may raise your interest rates, resulting in higher payments and more money spent over the life of the loan. In addition, new creditors are less likely to work with you if they see a charge off on your credit report. It is possible to fix or remove a charge off from your report.
Schedule your no obligation consultation with Credit Repair Kings today to discuss the removal of charge offs from your credit report.