How To Clean Up Charge Offs

Credit Report Scores - Who Determines Them?

There are three major credit reporting agencies: , , and .

Each of these credit reporting agencies receives information from credit grantors such as credit card companies, stores granting credit, mortgage companies, and banks. They compile your credit history and compute your credit report scores.

They provide your history and credit report scores to others who have a genuine interest in your credit worthiness.

What are Charge-Offs?

Charge-offs are non-paying loans or credit accounts that have been written off as losses. Merchants report the charge-offs to the credit bureaus.

To recover some costs, merchants typically sell these delinquent accounts to collection agencies. The collection agency pays the merchant a fraction of the value of your debt--usually about half of what you owe.

The collection agency then attempts to collect more than they paid for the account. The merchant no longer has an interest in the debt.

Once you pay a collection agency there is no incentive for the merchant to report your payment to the credit bureau.

If you can pay the entire balance, it is often to your benefit to pay the merchant directly. You can then contact the credit bureau to investigate the negative item. The credit bureau will contact the merchant. With a positive response from the merchant the credit bureau will remove the negative charge-off from your record.

You can often negotiate with a merchant to pay a major portion of your account and have them consider the account paid. Tell the merchant your honest financial situation and that you really want to pay what you can. If the merchant agrees, be sure the have the merchant report your account as "Paid as agreed" to the credit bureaus. Even statements such as "Paid" or "Settled" will go a long way on your credit report.

Even without your effort, charge-offs are typically dropped from credit reports after 6 or 7 years.

Cleaning Up Your Credit Report

A good score helps you get the best loans. The loan officer will be glad to see you because you will:

• Qualify for a larger loan
• Get a loan faster
• Get the best interest rates.

There are basically three ways to clean up your credit report.

• Dispute You can dispute items on your credit report. This may or may not remove the item from your report.
• Negotiate Arrange with your creditor to pay off the debt in exchange for them requesting the credit bureaus to remove the negative item.
• Pay and Wait Pay off the debt and wait (up to 7 years) for the item to be dropped.

In addition, a bankruptcy can remove negative items, but the bankruptcy can remain on your report for 10 years.

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Lexington Law is a Law Firm specializing in credit report repair. They have helped over 80,000 Americans improve their credit scores by removing inaccurate, misleading, or unverifiable information from their credit reports.

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The Lexington Law Firm is member of the online BBB and offers consumers a performance warrantee. From bankruptcies to charge-offs to tax liens, Lexington Law Firm has challenged virtually every credit problem under the sun and deleted over 600,000 such items to date.

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Credit Report Scores - How to See Them

Each of the three credit reporting agencies can provide you with a one-time copy of your credit report. Equifax, Experian, for example, will provide your report online for a fee of $9. Trans Union charges from $7.50 to $9 for your credit report.

All three credit reporting agencies will also provide a one-time copy of a "3-in-1" credit report. This contains your credit reports and your credit report scores from all three reporting agencies. Trans Union charges $34.95 while Equifax and Experian each charge $39.95.

Credit Report Scores - Improving Then

A good score helps you get the best loans. The loan officer will be glad to see you because you will:

• Qualify for a larger loan
• Get a loan faster
• Get the best interest rates.