Dealing with charge offs and collections in 3 easy steps!

Have you ever had a collection or charge off on your account and wondering how the heck did I get here? Well don't feel bad about it you are not the first and certainly not the last one to experience this. Take hope as I write this blog that all of that can change and will change if you take decisive action today.

Do not delay or put off your credit goals any longer because you don't feel like it or because you are not using it for something important right now, sooner than later you will need to show your credit worthiness and you will fail the test if your credit score is not on par.

Let's take a look at charge offs; charge offs not only looks bad on your credit profile but it is also one of the main reasons most lenders resist from offering you credit. To them you are a high risk and unlikely to repay your future debts.

What is a charge off? If you have a credit card account and fail to make payments for at least 180 days then the creditor will close your account on their end to avoid having any bad debts on their books, it will then be reflected as charge off on your credit profile. A charge off usually drops your score by 100 points and stays on your report for 7 years.

Charge off accounts are classified into two main categories paid and unpaid. Paid implies that the debt was paid in full. Even though charge offs are written off as bad debt on a creditors book it doesn't mean that they will not attempt to collect the money owing, write offs are often used for tax reasons on the creditors behalf but they still need their money. This is where a Collections Company comes into play.

Collections Collections..... Big Red Flag

Collections company only has one aim and that is to collect an outstanding debt. They will begin to call and write you in an attempt to make you confess to owing the debt or scare you into paying it. Be very careful of hearing that "If you pay the outstanding debt your credit score will increase, this not entirely true.

Here is how you deal with a charge off in any of these circumstances in three (3) easy steps;

1. Verify and Validate the debt, even when you owe it. often times these collections agencies when buying these old accounts have no account history to even show that you owe the debt and if they cant prove it automatically you don't owe it. Please do not call and confirm any information over the phone, when you receive a call ask the agent to seize and desist all calls to your phone and send what they are saying you owe to you in writing. Keep written copies and maintain a paper trail with these creditors/collections agencies, this is how you maintain evidence of your case to the credit bureaus when the need arise.

2. If they send you a reply and you do owe the bill after validation, negotiate with the creditor to pay the debt and offer to pay a partial amount which is usually lower than the original amount, along with removing it from your credit profile. Again never ever pay the debt until you have something in writing that says this is what we intend to do upon receiving your payment.

3. If the information is incorrect after validation,

step 1. Kindly ask to have the account removed by notifying the credit bureaus. Always remember to keep a trail of these occurrences.

You have a right under the FCRA to seek validation of any debt and the right to find out whether the collections agency has the legal right to collect it by asking for proof.

They should reply with the original contract, signature, payment history, date, etc. If they can not send you such information under the FDCPA (they can no longer collect payment and is required to stop calling and remove negative items from your credit profile).

Be your own best in everything, especially your finances. We know that bad credit happens to good people and it's time to work on securing your financial future.

At Maximum Solutions Credit Repair Services we assist our clients in removing incomplete, inaccurate, unverifiable, fraudulent and unauthorized items from their credit report.

Feel free to connect with us here today @407-930-7402 or sign up using or credit repair services.