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CreditRepair.com Review (2020): Cost-Benefit Analysis 🕵️‍♂️

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Have you noticed recently that your credit score is misrepresenting your financial history? Feel like you’re getting a raw deal on your debt rates and terms?

The increase in applications for loans, credit cards, and mortgages throughout Covid-19 has resulted in more people discovering mistakes on their credit reports. In fact, complaints to the federal Consumer Financial Protection Bureau have spiked, with a whopping 50% increase from March to June this year compared with the same period in 2019.

Within this figure, 86% of complaints are related to credit reporting or credit repair services – essentially, consumers feel taken advantage of by false promises. With a clear display of fraud in the credit repair industry, and so much at stake, who do you trust to help improve your credit report?

CreditRepair.com has a solid reputation of providing good results for its members. Though it is not accredited by the Better Business Bureau (BBB), it does have a record of increasing consumers’ TransUnion score by about 40 points, on average. It’s also well known for being time efficient, and following a clear three step process to help reach your individual goals.

In this review, we take you through this three step process, how much you’ll pay and what you should expect. We’ll also highlight some tips to maintain your credit score and strategies to remove a collection on your own.

CreditRepair has a solid record of getting its members good results. It offers a clear three step process, an efficient service, and a free consultation to help you decide if this is the right fit for you.

Fast Facts

  • Fees: $99.95 per month plus a setup fee of $14.99 
  • Highlight: Free consultation
  • Best for: Those looking for a clear and simple process

Rating

  • Fees: 9/10
  • Communication: 10/10
  • Dispute Process: 10/10
  • Customer Service: 10/10
  • Credibility & Trust: 9/10
  • Overall: 9.5/10

What is CreditRepair.com?

CreditRepair.com has an established and strong reputation as one of the leading credit repair companies you can find.

While there aren’t many details about the company, we have deduced that it was established in 2012, based on the website copyright, and is based in Seattle, Washington. The company states its mission and what distinguishes it from competitors on its site. 

The company’s mission states “[We] empower every individual to achieve the credit scores they deserve and enjoy a lifestyle of greater opportunity.”

CreditRepair.com homepage
Creditrepair.com homepage

The primary goal of the credit repair company is to empower people to overcome any credit problems, tidy up their files, and increase their credit scores. Doing this is the first step to establishing financial independence and strength, and begin feeling more in control of your finances again.

CreditRepair.com aims to help people increase their credit score, and arm them with the tools needed to begin their journey towards financial freedom.

Overview and Summary

  1. Based in Seattle, Washington, CreditRepair.com has a strong reputation in the credit repair industry.
  2.  CreditRepair offers a free personalized credit consultation, during which time you can go over your situation and discuss your needs and expectations in detail.
  3. The firm has several benefits including a clear 3 step process, a comprehensive selection of educational material, and an easy to navigate website.
  4. Those considering the credit restoration service can take advantage of the free consultation offered.
  5. The company’s downsides are that it is not clear on who its “experts” are, is not accredited by the Better Business Bureau (BBB), despite its positive customer reviews.
  6. The company states that it increases the average customers TransUnion credit score by 40 points. 

How Much Does CreditRepair.com Cost?

CreditRepair offers a free personalized credit consultation, during which time you can go over your situation and discuss your needs and expectations in detail. You will be able to access your credit report summary, in addition to an audit on all accounts, a free credit score evaluation, across the three major credit bureaus.

You can take advantage of the free consultation without making a commitment but should you choose to use the service, the company has a simple and straightforward pricing structure, which is a fixed-rate monthly payment of $99.95 per month. 

Separate to this, there is a one time fee of $14.99 charged to pull your credit report. Apart from this, there are no other fees or hidden fees that might catch you off guard.

These fees are not the most competitive available, but when compared to competitors, CreditRepair offers a lot for the price, including online tools to help manage the process throughout, educational material, credit alerts for any report changes, and 24/7 customer support.

Pros

  • Efficient service 
  • Clear process
  • Solid record of helping its members
  • Website is easy to navigate

Cons

  • Not accredited with the BBB 
  • Unclear who its experts are

How Does CreditRepair.com Work?

The CreditRepair process is an overall simple one with a clear three-step structure. When you sign up, the company will pull your credit report, and help you to analyze and identify any errors.

Next, the company will contact the credit companies to ensure they are fulfilling their obligations to you, and to liaise with the three major credit bureaus to make sure that the requested changes have been made.CreditRepaid will leverage all relevant consumer rules to protect your credit and ensure that all your personal information is accurate.

How to Repair Credit
CreditRepair follows a three step process to address your credit concerns

The last step will be to keep you informed on all steps of the process and any progress made through your mobile app, personal dashboard, a score tracker, and email alerts.

This is all enhanced by the educational material offered which enables you to learn all you need to know about credit repair including, how it works, who to avoid going forward, and how to become more financially secure in the long term.

One thing that stands out to us as a negative though, is that absence of a guarantee. This is particularly noticeable considering money back options are a core aspect of other services offered by competing credit repair companies such as Sky Blue and Credit Saint.

How to Minimize the Impact of COVID-19 on Your Credit Score

Before we get into all the highlights of CreditRepair, we are going to walk you through how you can relieve some of the impact of the pandemic on your credit score.

Let’s start off with some general best practices when it comes to credit standing, in the face of a pandemic. 

  1. If you cannot make repayments then call your lenders or insurers and ask for you.
  2. Always continue to pay what you can
  3. Stay on top of your credit reports, and understand your rights (we’ll speak about this more soon)
  4. Think about adding in some notes to your credit report, in particular if you think your score has been affected by Covid-19.

In addition to this, there are some steps you can take to avoid falling into debt during current times. Doing things like budgeting, talking to your lender to discuss your options, and again, paying what you can.

If you’re wondering how potentially late or reduced repayments will affect your score then be sure to contact your lender to find out. Thankfully, many creditors and lenders are aware of the financial difficulties consumers are under as a result of Covid-19, and are taking steps to alleviate this stress.

Where CreditRepair.com Shines

CreditRepair.com shines in a few different areas that customers will appreciate. Let’s go through the advantages of signing up with creditrepair.com.

The Website is Easy to Navigate

The website is straightforward and user-friendly. Visitors to the site can easily browse and find the information they’re after. 

The Company Displays a Solid Record of Results

While each credit situation is unique, the firm does have a strong history in the industry that is worth taking into consideration when making your decision.

Efficient 3 Step Process: Check, Challenge, Change

The credit repair process isn’t always straightforward. Some companies can make it a challenge with complicated processes and long waiting times. CreditRepair.com on the other hand provides a simple and straightforward three step process: Check, Challenge, Change. This makes it easy for customers to understand how the firm will help improve their credit.

You will be able to see what needs to be done, and make the process a more achievable journey.

Comprehensive Educational Section

Another undeniable highlight of CreditRepair.com is the array of articles that are available through its library. Customers can access hundreds of articles on debt solutions, credit improvement, identity theft, savings and loans. When it comes to loans, keep in mind that there are a number of ideal options for personal loans for fair credit, which will be more beneficial to you in terms of rates and terms.

Customers and potential customers can grow their knowledge on debt management solutions, how bad credit could affect you, and even get to know some efficient savings tips. Reading through these informative articles could help answer some questions you have, or maybe you didn’t even know you had, to help you keep financial stability.

This may prove more useful than most care to admit. The Consumer Federation of America (CFA) and VantageScore Solutions, LLC, recently released a survey highlighting that although low-income households were the most likely group to apply for credit amid the recession, they also typically knew the least about credit scores. This includes knowing invaluable things like the fact that low credit scores can cost you thousands more, and that credit scores actually measure your risk of not paying.

Therefore, understanding how credit can affect your life is a key part of helping you keep it under control. All of this information and more is readily available to read on the site, which can be a valuable tool for consumers alike.

Reputation

This is a huge factor when it comes to choosing the best credit repair company for you.

There are a lot of frauds out there who are attempting to profit off vulnerable customers, convincing you to pay a fortune for unnecessary services. 

CreditRepair.com on TrustPilot
CreditRepair.com has a 4.4 out of five rating on Trustpilot

CreditRepair.com, however, has established a solid reputation, with the majority of reviews being positive. In fact, the company is mostly ranked as excellent on trustpilot.

Convenience

The sheer convenience of this site is a positive. It can save you both time and money – two attributes that no one would turn down.

As opposed to going through the time consuming, painstaking task of analyzing your file line by line and then getting in touch with each bureau yourself, CreditRepair.com can do all the work for you.

Where CreditRepair Could Improve

Though creditRepair offers a seamless 3 step process, informative educational content, and a convenient service, there are some areas we believe the credit repair company could work on to fully meet customer’s needs.

Most notably, on May 3rd 2019, it was reported that the Consumer Financial Protection Bureau (CFPB) filed a suit against the firm, accusing the firm of violating federal laws. Here are some other areas that may be of concern for you:

Lack of Clarity

The website boasts other companies as trusted partners. Yet, there isn’t a lot of information available on what the partners role is, or any information confirming the legitimacy of these companies.

There also seems to be a lack of transparency surrounding how the experts communicate with the credit bureaus so that items can be removed from your credit report.

Not Accredited by the Better Business Bureau (BBB)

The Better Business Bureau (BBB) accreditation provides businesses with third-party validation of the company’s legitimacy and ethics. CreditRepair is, unfortunately, not accredited by the BBB, and holds a D rating at the time of writing.

The Service May Be Unnecessary

One of the main concerns with any company of this nature is their validity. There is a feeling that you are spending money on something you could achieve yourself.

While there’s no doubt this service is convenient, it is not necessary to correct your credit and improve your credit score. Especially if your financial situation is currently unsure or in dire straits. With this in mind, there are some particular ways to keep your credit score up when the economy feels uncertain. 

These include:

  1. Taking inventory of all your expenses and debts
  2. Talking with your insurers and lenders (or any other companies you owe debt to that you can’t repay)
  3. Continuing to repay as much as you can manage
  4. Monitoring your credit score and report consistently
  5. Noting on your report whether Covid-19 has impacted your credit score 

Who Should Use CreditRepair.com?

CreditRepair.com is best suited to people who have some unfair, inaccurate, or unverified items removed from their credit report. Though please be aware that a credit repair company can’t necessarily promise that your credit score will increase due to the Fair Credit Reporting Act (and stay away from any firm’s that do promise this).

The firm’s services are not the most vast, but the ones offered are specifically to help you get the best results. CreditRepair does not offer debt consolidation or credit counseling. This means that if your credit has been impacted through credible ways, the firm won’t be able to assist you.

 In this case, there are other viable debt consolidation options for bad credit that would be more suitable to you. This streamlines your payments into one monthly, manageable payment with potentially better rates.

If you’re not sure whether you’ll benefit from the services of a credit consultant or not, you can call CreditRepair.com on 833-841-1600 and take advantage of its free credit consultation.

How Long Will the Process Take?

The company acknowledges that all situations are unique but it does state that the average member uses its services for a total of six months.

The company uses the information it collects about your individual credit problem and needs, and creates a “game plan” that is customized especially for you. However, on a general level, the progress seen is generally that around 7% of bad credit items are removed each month.

What Can Be Removed From Your Credit Report?

You probably already know that bad credit can land you with higher interest rates on both your loan repayments and credit cards. Bad credit can also make it more difficult to get guaranteed approval on loans

CreditRepair.com works with credit bureaus including Experian, TransUnion, and Equifax, and your creditors to make a case against some of the inaccurate or unfair information on your credit report that may be causing you to have a lower score than you deserve.

💡 Helpful tip: Make sure you understand your rights to a free annual credit report. By law, these three credit bureaus are required to give you a free credit score every 12 months, once you ask for it.

The firm works to make sure your credit history is accurate, up-to-date, and a true representation of you, which all-in-all could help raise your credit score.

There are some particular items on your report that can be challenged. The items below must be invalid, unfair, or inaccurate to be removed:

  • Late payments
  • Collections
  • Charge offs
  • Judgments
  • Bankruptcies
  • Foreclosures
  • Repossessions

How Can CreditRepair.com Help Me?

So, how exactly will CreditRepair.com help you? The firm states that it will help repair your credit by eliminating negative items on your credit report.

CreditRepair.com also claims to work to improve your credit score. The company boasts that the average customer will gain an increase of about 40 points on their TransUnion credit score in less than four months of signing up.

The credit repair company also advertises its range of customized credit repair tools. These were created to offer some guidance through the tasks, to keep a positive credit score and see consistent progress. 

If you’re interested in repairing your credit, you could do some research on the top credit repair software. This software comes in lots of different shapes and sizes, with some assisting with disputes, and others helping you keep track of your score. It just depends on your needs and budget. 

CreditRepair.com Uses a Three-Step Process

After reading what customers have to say, it’s clear to see that a major part of the firm’s success in the credit repair process is because it lets customers know what to expect from the start. CreditRepair.com uses a three-step process to address each client’s credit needs.

CreditRepair.com Three-Step Process
CreditRepair implements a clear three step process for its members

The process begins with the first step: The Check. This happens when you sign up and it involves pulling three of your credit reports from the three major credit bureaus and identifying the information you would like to dispute. The team will gather information on your credit history and your goals and create a customized plan to improve your credit.

In this action plan, the second step is the Challenge. During this step, CreditRepair.com initiates a conversation between you, the credit reporting bureau, and the creditor. The credit repair team’s experts communicate with each party directly to discuss the issues, and stay in touch to confirm that the requested changes have been implemented.

The third step: Change. This alludes to the change in your credit score. On average, CreditRepair.com clients see an average of 7% of the negative items on their reports eliminated per month.

In addition, the firm works to create a positive and longer lasting impact on your health that moves beyond your time with them. The company does this by offering educational resources to help you deepen your understanding on the topic, and offering one of the top credit monitoring services to help you stay on top of your score.

Which is Better: Sky Blue or CreditRepair.com?

Interested in CreditRepair.com alternatives? Check out the pros and cons of Sky Blue credit repair.

Summary

Although the company lacks some information on its credit repair service options, its innovative technology and ability to eliminate negative items like charge offs and late payments in a time efficient manner, combined with excellent consumer repair reviews, good credit results, and a 24/7 credit evaluation.

The company also offers TransUnion credit monitoring as well as text and email alerts to all its members. There is an initial once off setup fee, however, it is less than most of its competitors. The credit repair company works alongside all three major credit bureaus to deliver you a fair and accurate credit report.

Should you sign up with the company, you will gain access to its mobile app, online dashboard, and a credit score tracker to help you stay on top of your progress. The credit company also focuses on giving real solutions to your credit problems, and motivating clients to begin improving their credit history to maintain an overall good level of credit.

If you have bad credit, we recommend you take advantage of CreditRepair.com’s free consultation to have a chat about your individual situation and needs.

Frequently Asked Questions

Is CreditRepair.com legitimate?

Unfortunately, CreditRepair.com is not accredited by the Better Business Bureau (BBB), and, at the time of writing, it has a D rating. However, the credit restoration firm has a solid reputation of repairing credit reports for its members in a timely fashion, and has a rating of mostly, “Excellent” on Trustpilot.

Is it worth paying someone to fix your credit?

Credit scores are generally a time-is-money proposition. In the end, if your credit score is poor, then you will pay a higher interest rate on your debt. For this reason, if you are in the financial position to, hiring a professional to look after it in an efficient way could be the wisest choice. Check out some credit repair companies near you to get you started.

Does CreditRepair.com offer a guarantee?

CreditRepair.com does not offer a money-back guarantee. It does offer stats for the average success rate achieved with previous members, not to mention a free consultation.

Can deleted items reappear on your credit report after working with CreditRepair.com?

Nothing on the company’s website, in the reviews, or on third-party websites like Trustpilot indicates that any items have reappeared on customers’ credit reports. That said, as credit bureaus are independent agencies, it is a possibility. 

How long does CreditRepair.com take to repair your credit?

This is completely dependent on the individual person, their situation and their needs. This holds true where you are hiring professionals, or attempting to go through the process yourself.

Are there discounts for couples, families, or active military?

CreditRepair.com does not offer any discounts for families, couples, or active military. The only discounts offered depend on the time of the year and are time-based.

What are CreditRepair.com’s hours?

Below is a list of CreditRepair.com’s hours. 

Enrollment:

  • Monday – Friday: 7:00 AM – Midnight EST
  • Saturdays: 9:00 AM – 11:00 PM EST
  • Sundays: 9:00 AM – 10:00 PM EST
  • Member Services:
  • Monday – Friday: 8:00 AM – Midnight EST
  • Saturdays: 10:00 AM – 7:00 PM EST
  • Sundays: CLOSED

How do you cancel a CreditRepair.com membership?

In order to cancel your membership, you simply need to contact the CreditRepair team using the contact information on the firm’s website. Just state that you no longer wish to be a member.

Can CreditRepair.com remove late payments?

According to the Fair Credit Reporting Act (FCRA) late payments can stay on your credit reports for as long as seven years from the date of delinquency. Should the account with the late payment stay open, only the late payment will be eliminated after this time.

What is a goodwill adjustment?

A goodwill adjustment is when a lender agrees to retroactively make changes to the way it reports a borrower’s account activity to the major credit reporting bureaus (Equifax, Experian and TransUnion).

How do I get a collection removed?

Here are three simple ways to get a collection removed:

  1. Request a Goodwill Adjustment from the Collection Agency.
  2. Use the Advanced Dispute Method to dispute the collection
  3. Demand that the debt is validated by the Collection Agency.

Is CreditRepair.com registered with the BBB?

Unfortunately not. CreditRepair is not registered with the BBB (Better Business Bureau). It does have majority strong customer reviews on third party sites like Trustpilot, though.

How much does CreditRepair.com cost?

To sign up to CreditRepair.com you will pay a monthly fee of $99.95, in addition to a once of initial payment of $14.99. Once you join, you will have access to a personal online dashboard where you can view your credit repair progress 24 hours a day.

Is my credit score too low for CreditRepair.com?

No, you do not need to have a minimum credit score to begin working with CreditRepair.com. The company works to help people with low credit score improve their report and potentially increase their score. To help you get where you need to go faster you could consider debt consolidation. This merges multiple debts into one streamlined debt, making it more manageable.

What are the benefits of CreditRepair.com?

CreditRepair.com has many benefits including a fast and efficient process, a solid record of good results, and comprehensive educational material. The company also offers a free consultation where you can ask all the questions you need to help you make a decision.

What can CreditRepair.com remove from my credit history?

CreditRepair.com can dispute the removal of some particular items on your credit report if they are unfair, inaccurate, or invalid. These items include: 

  • Late payments
  • Collections
  • Charge offs
  • Judgments
  • Bankruptcies
  • Foreclosures
  • Repossessions

Does CreditRepair.com help with identity fraud?

CreditRepair.com can help you if your credit has been damaged by identity fraud or identity theft.

If you have been a victim of identity fraud or identity theft and your credit has been damaged as a result, fear not. CreditRepair.com is one of the leading credit repair companies to help remove negative items from your credit report.

What is CreditRepair.com’s Phone Number?

CreditRepair.com’s phone number is 1-833-841-1600.

All reviews, research, news and assessments of any kind on The Tokenist are compiled using a strict editorial review process by our editorial team. Neither our writers nor our editors receive direct compensation of any kind to publish information on TheTokenist.io. Our company, Tokenist Media LLC, is community supported and may receive a small commission when you purchase products or services through links on our website. Click here for a full list of our partners and an in-depth explanation on how we get paid.

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Credit Repair Companies

How to Remove a Charge Off From Your Credit Report

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Charge offs are bad news when it comes to credit reports and scores. They’re considered major derogatory items (aka “major derogs”) and are among the worst types of entries you can have in your credit history.

In many cases, charged off accounts can remain on a credit report for up to seven years. But removing a charge off early is sometimes possible. Keep reading to discover three ways to remove charge offs from credit reports, along with other helpful details about these negative credit entries. 

Before we continue – If you want to avoid the hassle of removing a charge off by yourself and just want to hire a company to handle the process for you, our top recommendation is Credit Saint.

3 Ways to Remove Charge Offs from Your Credit Report

1. File a Dispute with the Credit Bureaus

The companies you do business can legally share details about how you pay your bills with the credit bureaus. Those credit bureaus, in turn, can gather information about you from multiple sources and package it together into easy-to-read reports. The credit bureaus then sell those reports to others who want to review your data to forecast the risk of doing business with you.

You also have rights when it comes to your personal credit information. One such right comes from the Fair Credit Reporting Act (FCRA). Per the FCRA, a consumer can “dispute with the consumer reporting agency the accuracy or completeness of any information in a report.” 

When you dispute a charge off or any other item, the credit reporting agency that receives your request has 30 days to investigate. At the end of the investigation period, the bureau must take one of the following actions with the disputed item:

  • Delete it
  • Update/correct it
  • Verify that it’s accurate   

If your dispute is successful, they may remove the charge off from your file. But if the investigation doesn’t go in your favor, the account will stay put. 

2. Pay for Delete

A pay for delete is a type of deal you can sometimes make with the original creditor. It starts with an offer to settle or pay back the full amount of a charged off account or a collection. In exchange for the debt being paid in full, you ask the original creditor to have the bureaus delete the account from your file. 

A creditor can ask a credit bureau to remove a charged off account from your report any time it wishes. There’s nothing illegal about the practice since credit reporting is optional. The bureaus, however, frown upon pay for delete settlements. 

Credit bureaus instruct debt collectors that report information to the credit bureaus (aka data furnishers) not to request deletions of accurate accounts in exchange for payment. In fact, data furnishers sign agreements with the credit bureaus promising to follow these and other rules. If a data furnisher violates its user agreement and gets caught, it might lose its ability to submit customer data to the credit bureaus in the future. 

Credit reporting is important to many businesses. It helps creditors encourage customers to pay on time. For this reason, convincing a creditor to accept a pay for delete offer can be a long shot. If you negotiate a payment for deletion deal on a charge off, get the offer in writing before you make any payments. 

3. Hire a Credit Repair Company

The FRCA gives you the right to dispute inaccurate information on your own. However, you don’t have to manage the process by yourself. Some people prefer to hire credit experts to assist with getting a charge off removed.

Credit repair companies can dispute questionable and inaccurate information on your credit reports—charged off accounts included. And if your initial dispute is unsuccessful, an experienced credit repair company should be able to help you follow up again. 

Of course, there’s no guarantee that credit experts will be able to remove a charge off from your credit report. Any trustworthy company will be quick to point out this fact. But if you’re comfortable with the fees and you don’t want to send and track credit disputes yourself, working with the best credit repair companies might be a good fit for you. 

If you’re looking for a good credit repair company that gets results, our top recommendation is Credit Saint. They are the most successful company for getting negative items removed from your credit, including charge offs. Take advantage of their free credit consultation to see how they can help you.

What Is a Charge Off? 

When you borrow money from the original creditor, you promise to repay the debt, plus interest and fees, at a certain amount (or percentage) per month. If you miss a payment, the credit card issuer may report you as late to the credit bureaus. Miss enough payments and that same creditor could opt to charge off your account.

The term charge off describes a debt on which you’ve fallen so far behind that the creditor no longer believes you will pay it back. So, the creditor writes the account off as a loss for accounting and tax purposes. 

A charge off, despite how it sounds, isn’t the same as debt forgiveness. If the debt is legitimate, you still owe the money you borrowed plus any interest and fees you agreed to pay. 

How Does a Charge Off Affect Your Credit Score? 

Derogatory information, like a charge off, has the potential to hurt your credit. To make matters worse, a charge off doesn’t just have the potential to damage your credit once. It might hold your score back to some degree for several years.

Should I Pay Charged Off Accounts? 

There are several factors to consider as you decide whether to pay a charged off account.

  • Are you expecting a credit score increase? Paying a charge off often won’t increase your score. If your goal is to boost your score, you may be better off to focus on bringing past-due accounts current, or paying down debt balances before you address charge offs. 
  • Do you plan to apply for new credit in the future? Some lenders may not be willing to work with you if you have outstanding, negative debts. A mortgage lender, for example, might want any charged off accounts on your credit report to show $0 balances before approving your application. 

If you decide to pay or settle a charge off in full, it’s important to keep good records. Get a copy of the debt balance you owe (or the debt settlement offer) from the creditor before you pay. Then follow up to get a receipt and zero balance statement afterwards.

How Long Does a Charge Off Stay on Your Credit Report? 

Credit reporting isn’t required. No law forces a company to report information about you to the credit reporting agencies. Nonetheless, many creditors do proactively opt to share customer data with Experian, TransUnion, and Equifax. 

When a debt collector shares your information or includes it on a credit report, there are rules they have to follow. The FCRA limits how long negative information, like charged off accounts, can stay on your credit report. Charge offs in particular can only remain on a consumer credit report for seven years. 

Is a Charge Off Worse Than a Collection? 

Charge offs and collections represent two types of derogatory accounts that can appear on a credit report. According to FICO, both charge offs and collections are likely to have a serious negative affect on your fico scores. 

But is a charge off worse than being referred to a collections agency from a credit scoring standpoint, or vice versa? The answer depends on several factors. 

1. The Age of the Account

Credit scoring models, like FICO and VantageScore, consider many details when evaluating your history. The age, or rather the recency, of derogatory information on your report is one such detail. Negative information on your credit report that occurred a long time ago won’t affect your FICO scores as much as recent negative items from failing to pay back the debt. 

So, if you have a debt collection account on your credit report that’s one month old and a charge off that happened three years ago, the debt collection account will most likely hurt your credit score more. If a charge off on your credit report is more recent than a debt collection account, then the charge off will probably have a bigger impact. 

2. The Balance of the Account

The information on a credit report is broken up into different sections. When you review your credit report, you’ll usually find charged off accounts (if you have any) in the “credit accounts” section. This section may go by a different name, but it will contain details about your current and closed accounts. 

Because of the way a charged off account appears on credit history, it might show that you owe a past-due balance to a credit card company. Past due balances are negative factors in terms of credit scoring. 

A debt collection agency, by comparison, does not list past-due balances. And the balance of the collection account itself is not considered by many scoring models. The fact that your account was turned over to a debt collector is what hurts your score. 

The balance on a collection tends to be largely irrelevant. So, if you have a charge-off with a past-due balance on your credit report, it could potentially be worse for your score than a collection (assuming both accounts are the same age). 

How Many Points Does a Charge Off Drop Your Credit Score? 

It’s difficult to predict how much any specific action will affect your credit file. Credit scoring models don’t consider one item at a time when calculating your score. Rather, scoring models look at all of the information on your credit report together and predict your level of risk based on the overall picture. 

A new late payment to a debt collector, for example, won’t drop your score by 20 points. Likewise, the appearance of a new charge off on your report isn’t worth a specific number of points either.

The impact a charge off has on your credit history is influenced by factors like the recency of the event and whether the credit card account has a past-due balance. The other items on your credit report are also relevant. And, of course, the type of scoring model that is used to calculate your FICO score makes a big difference in the outcome as well.  

Will a Charge Off Affect Buying a House? 

Mortgage lenders check your credit reports from all three credit reporting agencies when you apply for a home loan. If any of your reports contain negative information, like charged off accounts, it might cause some problems. For this reason, it might make sense to contact a credit repair company to see if they can help.

  • A charge off could affect your credit scores. Most mortgage lenders have a minimum credit score requirement that you need to satisfy before they will approve your loan application. Charge offs are negative. So, they might cause your credit score to drop to a point where you won’t qualify for a mortgage. 
  • An outstanding balance could hurt you. Some lenders may ask you to pay the balance on any charged off accounts (or at least settle them in full) before they’ll approve you for a mortgage. 

How Long Does It Take for a Charge Off to Be Removed? 

The credit reporting agencies must remove the charge off from your credit report after seven years from the date. It might be possible, using one of the methods above, to remove the charge off early. But there are no guarantees when it comes to getting items removed from your credit file. 

Trying to remove a charge off from your credit report can be a tedious process, especially if you’re not familiar with the FCRA and other consumer protection laws. But you don’t have to dispute charged off accounts alone. Credit Saint specializes in disputing errors that may be hurting your credit scores and showing you how to add positive information to your credit reports as well. 

 

How to Remove a Charge Off From Your Credit Report

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Reader Advisory: The National Trade Association we belong to has purchased the below classifieds. Determining the value of their service or product is advised by this publication. In order to avoid misunderstandings, some advertisers do not offer employment but rather supply the readers with manuals, directories and other materials designed to help their clients establish mail order selling and other businesses at home. Under NO circumstance should you send any money in advance or give the client your checking, license ID, or credit card numbers. Also beware of ads that claim to guarantee loans regardless of credit and note that if a credit repair company does business only over the phone it is illegal to request any money before delivering its service. All funds are based in US dollars. Toll free numbers may or may not reach Canada.

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Tips to avoid being defrauded by credit repair companies – Latest News, Breaking News, Top News Headlines

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In relation to the economic crises that have occurred in recent years, it is possible that your credit debts are increasing day by day, due to the use of credit cards, delays in paying mortgages, job losses, business closings , reduction of salaries among others. Reason why you could make the decision to go to a credit repair company thinking that they could support you with your credits. But before you could choose to request the advice of this type of companies, here are some tips to avoid being defrauded, according to what has been published by the National Commission for the Protection and Defense of Users of Financial Services (Condusef).

Tips to avoid being defrauded by credit repair companies

Although you could be anxious to pay your debts, you should be careful, because just as there are credit repairers that are known, there are others that only engage in fraud.

1.- Stay alert

There are no credit repairers that request cash or that you transfer it by deposit to a personal bank account. If you are presented with this type of situation, it is likely that they will try to carry out a fraud, so it is convenient that you could look for other options.

Tips to avoid being defrauded by credit repair companies. Photo: My Pocket.

2.- Do not sign any type of document without having read

If you have in mind to sign a contract with the credit repair company, first read this document in detail and verify what the conditions and deadlines are, and check what penalties are applied in case of delay or abandonment of the program. If you are not 100% convinced, do not sign it.

3.- Repair companies do not clean your credit history

In the event that the credit repair company you go to tells you that it could clean up your credit history, it is probably not true, so your credit history will be negative and in the future it could be difficult for you to obtain a new credit. It is also important to mention that no repair company could erase you from the credit bureau, even if they ask for money, since no person or institution can carry out this procedure.

4.- Look for valid options to negotiate your credit

There are other organizations that you could go to to negotiate or settle your debts, such as your financial institution, where you could agree on a fixed payment plan or, failing that, restructure the credit and also you could not be presented with fraudulent situations, which could lead to affect your personal finances.

It should be mentioned that credit repairers are companies that perform the function of intermediaries between the debtor and the financial institution to which it could be owed and their purpose is to offer the person who has the debt, a kind of negotiation with the banking institution through options for credit settlement. It also tries to reduce the amount through discounts and modify the credit history in the credit bureau.

According to information published by the Condusef, there is currently no legal framework that regulates the operations of credit repair companies, which means that these companies operate independently and independently, for this reason some people may go with repair companies who are not accredited, existing the probability that they are victims of fraud, and in the event that this happens, the Condusef does not have the faculties to offer them support.

More content about loans and personal finances, in our Credits section.



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