Charge offs are detrimental to a good credit score. They occur when an account becomes delinquent for 6 months.
An effective way of erasing a charge off from you credit history is to dispute the listing. This is accomplished by sending a credit repair letter to the credit bureaus.
In your credit repair letter you should explain why the listing is incorrect. For example the account has never been paid late, it’s not your account or information is wrong.
Our credit system is flawed and you are assumed guilty until you can prove otherwise. It is common for incorrect information to show on your credit history.
In response to incorrect information being reported congress passed the Fair Credit Reporting Act. This says that any listing that can not be verified must be removed from your credit report by the credit bureau.
It is not un-common for one charged off account to result in many negative listings and a ruined credit report. Let me show you the process of what happens to a charged off account.
The charged off debt will be sold to a collection agency by the lender. That collection agency will make efforts to recover payment. If they are unable to then the collection agency makes a new negative listing on your credit report.
Then the collection agency will turn around and sell your debt to another collection agency. This new collection agency will be able to report a negative listing if they are unsuccessful in collecting payment.
This process will continue dependent upon the size of the account. So one account can become many negative listings and ruin your credit score.
If you have many negative listings it will cause your score to go way down. It will also be difficult to get approved for new lines of credit.
In sum I encourage you to dispute the listing before you make payment. I would do this because making payment does not guarantee the listing will be removed.