If you are dealing with a charge off from a credit card account, you may be trying to determine whether you should still pay it off. If the damage has already been done on your credit report, you may not see much point in paying off the balance. Here are a few things to consider about whether you should still pay a credit card charge off.
What Is a Charge off?
In order to determine whether you should pay a charge off, you first need to understand what it is. A charge off does not mean that the credit card company is canceling your debt. Technically, you still owe the money to the credit card company even after a charge off takes place. A charge off is simply the credit card company removing the debt from their accounts receivables. When this happens, they will contact the credit bureaus and notify them that a charge off has occurred. When a charge off shows up on your credit report, it can be very detrimental to your chances of getting another loan in the future.
Paying the Balance
If you simply pay the balance that was owed, it could potentially benefit you a little when trying to get credit in the future. If a lender sees that you have a charge off on your credit report, it would definitely look better to them if the account was eventually paid for. Seeing a balance of several thousand dollars still outstanding on your credit report does not look good for you.
Removing the Charge off
Instead of simply paying the balance randomly, you might want to talk to the credit card company first. In some cases, you will actually be able to get them to remove the charge off from your credit report. However, they will not do this automatically as soon as you pay the bill. This means that you will need to talk to them before you send in any payments and ask them if they are willing to remove the charge off.
When you contact the credit card company, you may need to negotiate with them to get them to agree to removing the charge off. Determine how much you can afford to pay the credit card company in a lump sum. In some cases, you will be able to get them to accept less than you owe. If they take less than you owe, they may not be willing to remove the charge off from your credit report. In this case, they would still be writing off some of the bad debt. If you are willing to pay in full what you owe them, they may be willing to completely remove the charge off from your credit report. Talk to a representative from the credit card company and see if they would be willing to remove the charge off. If they are unwilling to remove it, you may want to consider just paying a partial amount since it does not do you much good to pay the full bill.