| A charge off takes place when the lender decides | | | | affordable interest rates and easy repayment terms. |
| that the borrower is a high risk client and that it is not | | | | This is just the beginning. The longer the charge off of |
| wise to expect repayment from the borrower. The | | | | credit card or other unsecured debt is allowed on your |
| decision to charge off a credit card or any other debt, | | | | account; higher are the chances of facing bankruptcy. |
| takes place after 6 months of non repayment. | | | | The charge off sets of vicious cycle. Low reputation |
| This transaction is prominently displayed on your credit | | | | means higher interest rates. Higher interest rate means |
| report. The fact that the lender decided to go in for a | | | | difficulty in repayment. |
| charge off of credit card or other unsecured debt will | | | | Difficult in repayment means chances of default. |
| significantly lower your credibility and your rating in the | | | | Chance of default again leads to possibility of charge |
| market. | | | | off. This vicious cycle can easily pull you towards |
| For starters, this information will be present on your | | | | bankruptcy unless you take remedial action |
| credit report for the next 7 years. Even if you repay | | | | immediately. |
| the debt in full, the credit report will show that the debt | | | | There are many ways to overcome the problem. One |
| was charged off after which it was repaid in full. | | | | option is to raise a dispute on the account and |
| The point here is that each and every lender will be | | | | successfully remove the same from your credit report. |
| informed that you did not make repayment for 6 | | | | Secondly, you can go in for a settlement deal where |
| months at a stretch and were classified as a hopeless | | | | you will at least repay half the amount owed. |
| case by your lender. | | | | This will definitely be better than non-repayment. If you |
| Needless to say, this will hit your credit report | | | | have sufficient assets, you can try to dispose any |
| drastically. Your credit score will come down and your | | | | asset and convert the same into a settled account. |
| reputation in the market will suffer. More and more | | | | You should also simultaneously make use of credit |
| instances of high interest rates being charged on your | | | | repair and credit solutions that will help you improve |
| loans will occur. | | | | your credit score and bring it back to normal as quickly |
| If you are planning to go in for a home loan or an | | | | as possible. |
| automobile loan, you will find it difficult to qualify for | | | | |