I have a debt from a department store credit card. It was charged off a few months ago. I have the money to pay it now. I read somewhere that if I pay off the account with the creditor that I should ask for something in writing stating how the account will be listed on my credit report. I also read that there are circumstances where you could ask the creditor to remove the entire account from the credit report. Is all of this accurate?
- TSC
Dear TSC,
In general, accurate information cannot be removed from a credit report. Once paid, the status of the account should be updated automatically to show that it is paid in full. Negative account information, such as late payments and charge offs, remain on the report for 7 years from the original delinquency date.
Creditors Must Report Accurate and Complete Information
Creditors who choose to report information to the credit reporting agencies have an obligation to ensure that they report accurate and complete account information. Therefore, if you ask a creditor to delete accurate information, it is unlikely that they will do so.
In some cases, there may be extenuating circumstances, such as a billing error on the part of the creditor. In these instances, the creditor can contact the credit reporting companies and request the account be removed from your credit report entirely.
How a Paid Charge Off Appears on Your Credit Report
If you choose to pay the account in full, the account will be updated to show as a "Paid Charge Off."
Although the account still will be considered negative, a paid charge off is typically viewed more positively than an unpaid charge off. Paying a charge off does not remove it from the credit report.
In some cases, a lender may offer a settlement agreement to satisfy a past due debt. When you settle an account, the creditor agrees to accept a payoff amount that is less than the amount originally owed. Because the creditor is taking a loss, a status of settled is considered potentially negative, though it is better than if the debt were not paid at all. If an account is settled for less than the full balance owed, the account will appear on your credit report with a status of "Settled Charge Off."
Both a Paid Charge Off and a Settled Charge Off will remain on the credit report for seven years from the initial missed payment that led up to the charge off status.
Thanks for asking,
The "Ask Experian" Team