Base charge-off disputes on a factual inaccuracy

Account Balance. Has the account been transferred or sold to a collection agency? If so, the account balance should be at zero. Many times the account balance will report on the charge-off account as well as the collection agency account. An original creditor who has sold or transferred the account to a collection agency cannot continue to report a balance. This is a factual error that can be disputed because it is inaccurate or incorrect credit reporting.

Dispute the balance and ask for a deletion. Sample Letter: I am writing to dispute [name of account and account number] on credit report number [xxxxxx]. The balance listed on the account is incorrect. Please delete the account.

The letter does not have to be long. Make no mention of the fact the account has been transferred or sold to a collection agency and that the balance should be zero. In other words, do not help the credit reporting agencies “correct” information.

Always ask for a deletion of the entire account because corrected negative information does not help improve your credit score. But keep in mind the credit bureaus are not required to delete incorrect information; they can simply correct the information to reflect accurate reporting.

Open Date of Account. Is the opening date of the account correct? If not, dispute the date. It may be a minor issue; nevertheless, it is a factual error you can base a dispute upon. A simple letter stating the opening date is incorrect. Request a deletion of the entire listing. Do not give them the correct opening date as it is their responsibility to investigate, not yours.

Highest Balance. This category on a credit report can often be incorrect. Dispute the “highest balance” you never know, you may get the entire listing deleted if the original creditor cannot provide the correct high balance especially if the account is older and they no longer have the records.

Late Payments. Are there late payments after the account has been charged-off? If so, how can that be? There should be no delinquencies after the “closed” date. Additionally, does the credit report show an amount charged off along with a past due amount? If so, this is incorrect reporting if the charge-off account has been sold or transferred to a debt collector. Request a deletion. It may only be corrected to reflect a past due amount of $0 but at least try to get a deletion because accurate negative information is still negative on your credit reports.

Dispute account status. Charge-off accounts that have been sold should not be listed as currently open by the original creditor. Request a deletion of the account even though it may only be corrected, as stated above, it does not hurt to request deletions.

Dispute Re-Aged Accounts. Creditors and collection agencies that re-age accounts are seriously affecting your credit score. It is imperative that you dispute re-aging of accounts. Re-aging causes a negative account to appear more recent. The more recent the charge-off appears to be, the more detrimental to your credit scores. Re-aging also causes an item to stay on your credit report longer which is not only illegal but also a credit score killer!

There is an exception to disputing charge-offs. Let’s say the charge-off account has been paid and two years have passed. It may be wise to just leave it be. Removing it may lower your credit score because of the date of last activity. You want to avoid the date of last activity on the account appearing as current. Remember some older negative entries matter less when calculating credit scores. Once a charge-off gets 48 months or older, it is no longer being used to calculate your credit score. Unless you are purchasing a home or in the cross-hairs of being sued for unpaid debt, leaving it alone may be the best strategy.

Exercise Caution when disputing an older Charge-off

When disputing a charge-off you run the risk of lowering your credit score if the dispute returns verified as accurate. This can hurt your credit score because the credit bureaus will update the last date of activity on the account. Once the date of last activity is updated the negative account appears recent. Often times older charge-offs are not updated monthly by the original creditor which is good for your credit score.

Recent activity, whether that activity is a payment, a missed payment or monthly reporting by an original creditor, all counts as recent activity. Updating a negative charged-off account does nothing but causes the negative account to look more recent. Recent negative information on your credit reports is more detrimental then older negative information. Just consider all possibilities when disputing a charge-off; it may be better to let it age off.