Note that your "charged off" debt is not written off or cleared off.The creditor may sell the debt to another third party collection agency or even junk debt buyers who will want to collect the debt at any cost. However, the debt collector cannot harass you in such a case and can be sued under the FDCPA.

1. Beware of Charged off Debts! Establish A Credit
History
As debtors you will want to look for an easy solution to the sticky situation you have gotten into –
not being able to pay the debt. You and the creditor may come into an agreement over the debt and
he will agree to charge off the debt because it has become worthless. It is known as “Specific
Charge Off” method.
This method though may put you at ease has issues to be cautious of. When the creditor charges off
the debt he is showing a loss in his income tax. This does not mean that the debt is dead and cannot
be recovered. He can still recover from you at a later date.
Note that your charged off debt is not “written off” or “cleared off”. The creditor or the debt
collection agency that bought the charged off debt can actually collect the debt. The creditor may
sell the debt to third party collection agencies called Junk Debt Buyers who want to collect the debt
at any cost. They buy all rights from the creditors and hence become the new legal owners of the
debt. The debt collector now resorts to all and sundry practices to get his meat. However, the debt
collector cannot harass you and can be sued under the FDCPA.
Once the debt has been charged off the creditor is required to report to the credit bureau within 90
days of the charged off date.
If possible, work out a deal with the collectors and pay off and get a “paid in full” on the paper. This
assures you of a peaceful future. You may have the debt “written off” in case you are unable to pay
it. However, if the debt is written off, it will appear as a bad remark on your credit report for seven
years.
• While negotiating with creditors or debt collectors about charged off accounts:
• Remain calm and composed in case your debt is “charged off”
• Do not give any future commitments that you may not be able to keep
• Negotiate for a small amount to pay every month to keep from being charged off
• Do not give postdated checks
• Do not give your checking account details
• Get everything on paper
• If you are not able to negotiate with one agency, wait for another agency to pick up the debt
You may contact an FDCPA attorney to assess your case and take his help to proceed with legal
action.
In American society credit history is of extreme importance. Your credit history is linked to your
social security number. Your credit history is a condensed data sheet of your loans, your repayment,
whether you pay on time etc.
To get a loan you must have a good credit history. To acquire a good credit history you must have a
repayment history of a loan. This is a typical problem that is difficult to come out of.
You may start establishing a credit history by opening a savings account and a checking account.
Maintain this account without any check bouncing. Bank account transactions show how you
manage your money. However, a bank account does not assure you of getting a loan. The lenders

2. would look whether your utility bills or other apartment bills in your name are paid in time.
Your employment history can also be taken into account by creditors. If you have a steady job with
a good pay this can also be considered as an advantage to get a loan. If you have stayed in a
residence continuously for a good period of time, this also is considered to be a positive point by
creditors.
If you have managed to get a vehicle loan and have repaid without defaulting you build a good
credit history fast. Often, people take loans to maintain a good credit record. You may also opt for a
co-signer with good credit history to sign your application for credit card. However, if you default
on the payment, the co-signer will be in trouble.
Store cards are another option before you are accepted by creditors. Gas stations, departmental
stores and local stores are all a good bet. Maintain a good record on these cards by paying them off
completely every month. Some of these cards are not reported to credit bureau. It is advisable to
check if the card you are opting is reported to credit bureaus. It is a wasted effort if you are trying to
build a credit history with unreported cards.
After establishing your record with these stores your chances of being accepted by creditors
improve tremendously.
After establishing credit history by using these store cards etc, you may apply for the actual credit
cards. You may first approach your bank where you have already established a record with your
banking transactions.
Often you are approached by credit card companies asking to apply. This does not ensure their
approval. Do not try to apply for too many cards at one time. Rejections by creditors also matter to
building credit history.
Getting credit cards or loans to build credit history is only the first step. The actual part begins once
you start using these facilities. To have a good credit history you must follow certain simple rules.
Once you do get credit cards you should:
• Keep Credit card details secure
• Make payments on time
• Close the account if you have discontinued a card
• Pay more than the minimum due
• Keep a track of your payments and credit rating
• Always spend l3ess than you can afford
Want your bad credit to be repaired or have a dispute with your credit report? Get free help by
our Bad Credit Repair Attorney .