How to Remove a Charge-Off

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A charged-off account is one that appears on your credit report with either an R9 revolving credit charge-off or an I9 installment credit charge-off code. Both codes mean that after attempting to collect on a debt, a credit card company or lender declared the account a loss and wrote it off as a bad business debt. Once this happens, the Fair Credit Reporting Act, or FCRA, allows credit bureaus to display the information for up to seven years. The procedures for removing the charge-off -- and the party you must must work with to do it -- depend on the status and age of the debt.

How Credit Bureaus Treat Charge-offs

A creditor does not have to report negative information about your account to a credit bureau. However, if it does, all three major reporting agencies must include the information in your credit profile. In addition, even though the account will show as closed, you remain liable for paying a charged-off debt until the statute of limitations expires. No credit bureau will remove a charge-off unless the reporting creditor instructs the agency to delete the information from your credit profile.

Do Nothing

Credit bureaus must delete negative information seven years from the date a creditor reports the account as delinquent. If the scheduled fall-off date, which you can find in an account's status details section, is drawing near, do nothing and let the information disappear naturally. The FCRA says that each credit bureau must provide you with a free copy of your credit report once every 12 months if you submit a request through the Annual Credit Report website. Visit the website and request a free copy of your credit report from Equifax, Experian and TransUnion.

Dispute the Charge-off Entry

Dispute a charge-off entry that remains on your report past the seven-year statute of limitations. You'll need to send a dispute letter to each agency that shows the error and provide supporting documentation, such as a copy of your credit report on which you highlight the account status details. To assist you, the Federal Trade Commission has a dispute letter template on its website. When an investigation shows your dispute is valid, the FCRA says the reporting agency has three business days to delete the information.

Negotiate With Creditors

Contact the creditor and negotiate payment arrangements that settle an unpaid debt in part or in full. According to the Nolo legal website, you'll need to contact the original creditor if a collection agency now owns the debt. As part of the negotiations, ask that the creditor either send a Universal Data Form to each credit bureau deleting the account or report the debt as satisfied in full once when you pay the agreed-upon amount. Get any agreements in writing.

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