How Do You Dispute a Charge Off Account?
Gain clarity and control over adverse credit report entries. Navigate the steps to dispute inaccuracies and work towards a healthier financial profile.
A charge-off account occurs when a creditor determines a debt is unlikely to be collected after a period of non-payment. This accounting adjustment removes the debt from their active accounts, typically after 180 days of delinquency for credit cards and revolving accounts. While the creditor writes off the debt internally, the consumer’s obligation to repay remains. These entries appear on credit reports, significantly lowering credit scores and impacting future borrowing opportunities. This article guides readers through the process of disputing a charge-off account on their credit report.
Gathering Information for Your Dispute
Initiating a dispute requires careful preparation. First, identify the specific charge-off entry on your credit report, noting the account number, creditor’s name, and reported date. Accurate details are important for a successful dispute.
Obtain free copies of your credit reports from all three major bureaus: Experian, Equifax, and TransUnion. AnnualCreditReport.com is the official source, allowing one free report from each bureau every 12 months. Reviewing all three reports is important, as information may vary.
Gather all relevant personal records related to the account. This includes payment confirmations, bank statements, and any correspondence with the original creditor. If identity theft is suspected, collect official reports or documentation supporting this claim.
Identify the specific basis for your dispute. Common reasons include inaccurate reporting of the amount owed, incorrect dates, or the debt not being yours due to identity theft or mistaken identity. The debt may also have been paid or settled but the charge-off was never updated. Pinpointing the exact error strengthens your claim.
When drafting the dispute letter, include your full name, current address, and the account number of the disputed charge-off. Clearly state you are disputing the charge-off, specify the reason, and request the desired action, such as deletion or correction. Reference supporting documents within the letter and include them as copies, not originals, to protect your personal records.
Submitting Your Dispute
After preparing your dispute letter and supporting documents, formally submit your dispute to the relevant parties. First, send your dispute to the original creditor who charged off the account. This allows the creditor to review their records directly.
When mailing your dispute to the original creditor, use certified mail with a return receipt requested. This provides proof your letter was sent and received. The correct mailing address for disputes can often be found on original account statements, on your credit report, or by checking the creditor’s official website.
In addition to the original creditor, submit your dispute to each of the three major credit bureaus: Experian, Equifax, and TransUnion. Each bureau offers multiple methods for submitting disputes.
Online dispute portals are a common method, accessible via each bureau’s website. These portals guide you through entering your personal information and details about the disputed account. You will then be prompted to upload supporting documents.
Alternatively, mail your dispute letter and supporting documents directly to each credit bureau. As with the creditor, use certified mail with a return receipt requested for each letter. Each bureau maintains a specific mailing address for disputes, found on their respective websites.
Maintain meticulous records of everything you send. Keep copies of all dispute letters, supporting documents, and certified mail receipts. Also, keep a detailed log of all communications, including dates, names, and discussion summaries, if communicating by phone.
Understanding Dispute Resolutions
Once your dispute is submitted to the original creditor and credit bureaus, an investigation begins. Under the Fair Credit Reporting Act (FCRA), credit bureaus have 30 days to investigate. This period can extend to 45 days if you provide additional information.
During the investigation, the credit bureau contacts the data furnisher (the original creditor or debt collector) to verify the disputed information’s accuracy. The data furnisher must investigate and report findings back to the credit bureau. You should expect communication from both the credit bureaus and potentially the original creditor regarding the investigation’s status and outcome.
There are several possible outcomes to a charge-off dispute. One outcome is deletion, where the charge-off is removed from your credit report if found inaccurate or unverifiable. Another is modification or correction, updating the charge-off information to reflect accurate details, such as the correct amount or date of last activity.
The third outcome is verification, meaning the charge-off is confirmed accurate and remains on your credit report. If verified but you still believe it is inaccurate, you have further options. You can add a brief statement of dispute, up to 100 words, to your credit report, explaining your position. This statement will be included whenever your credit report is accessed. You may also contact consumer protection agencies, such as the Consumer Financial Protection Bureau (CFPB), to report the issue.