Can I Dispute a Charge Off and Get It Removed?

A charge-off occurs when a creditor determines a debt is unlikely to be collected and removes it from its active accounts. This accounting action happens after 120 to 180 days of non-payment. While written off as a loss by the creditor, the debt remains legally owed by the consumer. A charge-off appears on a credit report, signaling to lenders that the debt was not repaid. This article guides on disputing a charge-off.

Understanding Valid Grounds for Dispute

Disputing a charge-off is appropriate when the information reported on a credit file contains inaccuracies or errors. A dispute is not simply a request to remove a valid debt that a consumer wishes to avoid. Instead, it targets issues such as identity theft, where an account was opened or misused without the consumer’s knowledge or authorization. Evidence like a police report or identity theft affidavit is needed.

Incorrect amounts reported, such as balances not reflecting payments or adjustments, are valid reasons. An account erroneously attributed to the wrong individual, indicating a credit file mix-up, is another. Payments made but not accurately credited also justify a challenge.

Duplicate reporting of the same debt by multiple entities, like the original creditor and a collection agency, warrants a dispute. If the charge-off is reported beyond the permissible reporting period, generally seven years from the original delinquency, it should be disputed. Consumers must gather supporting documentation, such as bank statements, payment receipts, or account records, to substantiate claims.

Disputing Directly with the Original Creditor

Initiating a dispute directly with the original creditor can sometimes be an effective first step in addressing an erroneous charge-off. This process begins by formally notifying the creditor of the inaccuracy. It is recommended to send a dispute letter via certified mail with a return receipt requested, providing documented proof that the creditor received the communication.

The letter should clearly state the account number, precisely identify the disputed information, and explain the specific reason for the inaccuracy. Supporting documents, such as copies of payment records or other relevant evidence, should be included with the letter. It is important to send copies only, never original documents, to ensure personal records are retained.

Upon receiving a dispute, the creditor has an obligation to investigate the claim. Federal regulations generally require creditors to investigate and respond to disputes within 30 days. If the investigation confirms an error, the creditor is then responsible for correcting the information with all credit reporting agencies to which they furnished the data.

Disputing with Credit Reporting Agencies

Consumers can also dispute a charge-off directly with the major credit reporting agencies: Equifax, Experian, and TransUnion. Each agency offers multiple avenues for dispute submission: online, mail, and telephone. Online submission is often fastest, but all methods require specific information.

When disputing, consumers need to provide personal identifying information, the account number, and a concise explanation of inaccuracy. Submit any supporting documentation that substantiates the claim. The Fair Credit Reporting Act (FCRA) mandates investigation within a specific timeframe.

Credit reporting agencies have 30 days to investigate. This period can extend to 45 days if the consumer provides additional information. During this time, the credit bureau contacts the data furnisher, usually the original creditor, to verify accuracy.

What Happens After a Charge-Off Dispute

After a charge-off dispute is submitted and investigated, several outcomes are possible. If an error is confirmed, the account may be updated to reflect the correct information, such as an adjusted amount or a change in status. In cases where the charge-off is found to be entirely inaccurate, unverified by the data furnisher, or reported outside the permissible timeframe, the entry should be removed from the credit report.

Alternatively, the investigation may result in the account being verified as accurate. This outcome means the original reporting is confirmed as correct by the creditor, and the charge-off will remain on the credit report. Regardless of the outcome, the credit reporting agency will provide written notification of the results of their investigation.

Following any dispute, it is prudent for consumers to regularly monitor their credit reports from all three major agencies. This ongoing review helps ensure that any corrections are properly applied and that no new inaccuracies appear. Consistent monitoring supports the maintenance of an accurate credit profile.