Charge Offs / Settlements

iVillage Member
Registered: 10-10-2004
Charge Offs / Settlements
3
Thu, 10-28-2004 - 8:28pm
Hi All,

I noticed on my credit report there is an account listed as a Charge Off and the account is closed. I have no idea what the debt is about but I would like to fix that blemish.

My question: Is there any way to contact that company and arrange to pay them or am I stuck with a charge off?

Question 2: Someone told me that it was bad to accept settlements. Would it reflect badly if I accepted a settlement and paid the people off or should I struggle and pay off the whole debt. All of these accounts have been dormant for over years so it would seem like the companies would be satisfied to receive a settlement... This whole situation has me confused. I have always been a cash only person and now that I'm about to land the job of my dreams - this pops up. *sigh* Thanks in advance to all that respond.

iVillage Member
Registered: 02-19-2004
Thu, 10-28-2004 - 9:47pm
You should probably ask someone who knows for sure, but my understanding is once something is charged-off, it stays as a charge-off on your credit for 7-10 years. I used to have some, they dropped off after 7 years. I knew someone who used to work in credit, and they said that most companies/credit reports drop them off after 7 years, but they are basically giving them a 3 year grace period in case it doesn't drop off, they aren't in trouble.

You can still contact the company and make arrangements to pay a charged-off debt. Instead of charged-off with a balance due, it will show on your credit as charged-off but paid in full.

Settlements are bad, because the company is getting less than the full debt repaid, so they still have a loss. Anyone looking to give you credit in the future will say you are more of a risk because you didn't pay your debts in full. But a settlement is better than not paying it at all. I think settlements usually happen for charge-offs, so the thing is going to be on your credit for years anyway. If settling gets you out of it and allows you to focus on other debts, then I wouldn't loose sleep over it.

I think charge-offs are bad to have on your credit (they kept me from getting a car loan for years), but charged-off and paid by settlement is only slightly worse than charged-off and paid in full, and both are better than charged-off but unpaid.

Photobucket

Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Fri, 10-29-2004 - 2:44pm

Hi there!

All my best,
Danni

iVillage Member
Registered: 09-21-2004
Fri, 10-29-2004 - 5:23pm
What does charge off mean?