Charge-Offs and Collections

Charge-offs and collections are two very different things. The same account can give you two bad credit entries on each of your three credit reports if the lender charges it off, then tells it to a collection agency. The original account shows that it's charged off, which is very bad for your credit score. The debt collector adds a collection account that harms you even more.

You can sometimes fix bad credit that involves charge-offs and collection accounts by finding disputable mistakes. Debt collectors sometimes buy large portfolios of bad debt accounts for pennies on the dollar. They don't have proper documentation, so the credit report entry has some sort of mistake. You can challenge it, and the collection agency won't have the proper information to validate it. Now your credit is repaired, at least partially, because the collection account is erased for lack of validation. This process is covered in depth, with easy to follow steps, in my $2.99 Kindle book on free credit repair (the book is free to Amazon Prime members).

The original account is trickier, but it's not impossible that you'll someday find a wrong date, amount, spelling, or something else in the charge-off entry that gives you the right to legally file a dispute. Remember, disputes are free, and you're entitled to free annual credit reports, so it never hurts to check. Read my book if you're not sure how to fix your credit for free yourself.