| An "uncollectible" account is one that creditors don't | | | | money, but may be willing to listen to an offer. The |
| think they have a chance to recoup their money on. It | | | | best case scenario for consumers is to arrange a |
| may then become a charge off, and is a negative | | | | payment schedule to take care of this matter. This will |
| entry on the credit report of the consumer in violation | | | | really help move the lender off their initial position. If a |
| of the loan agreement. This will typically happen when | | | | contract is agreed upon, one clause should indicate |
| borrowers don't pay back the money in a timely | | | | that following the last payment, the charge off will be |
| fashion. However, this doesn't mean that the contract | | | | removed. It is important to get this pact in writing, and |
| is cancelled, and the debt may be sold to a collection | | | | follow up when the debt is paid. There are lenders that |
| agency to try and recover the money. | | | | will not settle, and some even have legal language |
| For consumers, a charge off represents a bad mark | | | | which prevents this course of action. |
| on their record, and will affect their financial dealings. | | | | Another method readily available to borrowers is to |
| The age of the charge off can significantly affect the | | | | initiate a dispute with the credit bureaus. They process |
| credit score; with newer ones lowering it more than | | | | a lot of information, and can make mistakes that are |
| those that are older. For borrowers attempting to get | | | | damaging to consumer's credit reports. In fact nearly |
| a new loan, this is seen as a red flag by lenders, who | | | | 80% of all documents of this type have been found to |
| will view this person as a bad risk. | | | | contain errors, so it is likely a dispute may be inevitable. |
| Charge offs can only be deleted with the help of the | | | | This can be done by the consumer or another party |
| lending institution that reported it to the credit bureau. | | | | who is an expert in this process. Getting charge off |
| For the debtor, this means contacting the proper | | | | removed from their credit statement is one of the best |
| authorities to get this item stricken from the record. | | | | ways for consumes to repair their credit score and |
| The process begins by contacting the creditor for | | | | allow lending institutions to begin seeing them in a |
| some type of settlement. They of course want their | | | | better financial situation. |