A charge-off on your credit report can feel like a heavy burden. It might lower your credit score, raise red flags for lenders, and make qualifying for loans or credit cards harder.

But not all charge-offs are valid. If you notice a charge-off on your credit report that seems incorrect, unfair, or unauthorized, you have the right to dispute it.

To help you get started with the process, we’ve put together this step-by-step guide on how to dispute a charge-off. It explains when to take action, what documents you’ll need, and how to improve your chances of a successful resolution. 

We’ve also covered how virtual cards can help you avoid identity theft and unauthorized charges so you can avoid dealing with wrongful charge-offs in the first place.

What Is a Charge-Off?

A charge-off occurs when your creditor writes off your debt as a loss after concluding that you’re unlikely to pay it off through regular payments. This usually happens when you’ve missed payments for an extended period, typically between 120 and 180 days^[1], and aren’t responding to the creditor’s reminders.

Once a debt is charged off, it may be transferred to a collection agency or sold to a debt buyer. The lender will usually report it to any of the three major credit bureaus:

1. Experian
2. Equifax
3. TransUnion

Once reported, the charge-off will appear on your credit report, where it will remain for up to seven years^[2] before it expires.

Not all lenders and collection agencies report to every credit bureau. Some may report to only one or two of them, while others may not report at all. As a result, the charge-off may show up on some of your credit reports but not others, depending on where the lender shares the information.

Do You Have To Pay Back Charge-Offs?

When a bank or creditor charges off a loan, you’re obligated to pay it off. While the original creditor will stop trying to collect the debt, you may be contacted by debt collection agencies through phone calls, emails, and letters. 

In some cases, they may even take legal action, suing you for the amount you owe. If you lose the lawsuit, a judge might issue a court order requiring you to pay the debt.

Can You Dispute a Charge-Off?

You have the right to dispute a charge-off if you believe it’s inaccurate or the result of an error. The common grounds to dispute an illegitimate charge-off are:

• Erroneous reporting—A charge-off could be a result of an error on the creditor’s end, like mistakenly filing a charge-off or reporting an account that isn’t yours.
• Identity theft—You may be a victim of identity theft or fraudulent activity, where the fraudster makes unauthorized charges on your accounts, resulting in unpaid debt that can eventually lead to a charge-off.
• Incorrect information—The creditor may misrepresent any part of the charge-off information (for example, the amount or the dates).

How To Dispute a Charge-Off on Your Credit Report

The charge-off dispute process requires submitting a formal request, along with supporting documents, to the credit bureaus or the creditor that reported the charge-off. The process typically involves the following steps:

1. Review your credit report.
2. File the dispute.
3. Attach the required supporting documents.

1. Review Your Credit Report

You should regularly review your credit report to spot any unusual activity on your account. You can access your credit report for free once per week from each of the three major credit bureaus.

Here’s how to review your credit reports thoroughly:

1. Check personal information to identify incorrect details, such as misspelled names, wrong addresses, phone numbers, or Social Security numbers (SSNs).
2. Look for any hard inquiries—these occur when a creditor pulls your credit report to make a lending decision on your loan. If you see inquiries from companies you don’t recognize, or if you didn’t apply for a loan at all, it may signal fraud.
3. Verify that all listed credit accounts are ones you’ve opened. Check if the account details, such as balances, credit limits, payment histories, and loan amounts, are accurate.
4. If you have access to multiple reports, compare old and new ones to identify any changes.

2. File the Dispute

You can typically submit a dispute by mail, phone, or online either to the credit bureaus or the companies that provide them with information, which are known as data furnishers (credit card issuers, lenders, or financial institutions).

Disputing directly with the data furnisher can be beneficial, as they can update the information with all the credit bureaus they report to. Otherwise, you may need to file separate disputes with each credit bureau individually using these portals: 

• Experian Dispute Center^[3]
• TransUnion Service Center^[4]
• MyEquifax^[5] 

3. Attach the Required Supporting Documents

When filing a dispute, you’ll need to provide supporting documents, which will vary depending on the type of information you’re disputing. Here are some examples of documents that may be required during the investigation:

• A valid driver’s license
• Birth certificate
• A utility bill as proof of address
• Current bank statements showing account details
• Letters from a lender confirming an account correction
• Proof of identity theft, if applicable
• Bankruptcy schedules or other court documents
• Student loan disability letters

What Happens After You Dispute a Charge-Off?

Within 30 days of submitting your dispute^[5], the credit bureau should review your claim and notify you of the results. As part of the investigation, the bureau may contact your lender or creditor to verify the disputed information.

Throughout the process, you may receive updates, and you can also check the status of your dispute online through the bureau’s dispute center. Depending on the outcome, the disputed information may be corrected, updated, removed, or confirmed as accurate.

How Does a Charge-Off Impact Your Credit Score?

A charge-off can have a serious negative impact on your credit score, signaling to potential lenders that you failed to repay a debt as agreed. The extent of the damage depends on factors such as your overall credit history and the scoring model used.

Paying off a charge-off won’t remove it from your credit report, but the status may be updated to “Paid Charge-Off,” which is viewed more favorably by lenders. In some cases, you may be able to negotiate the removal of the charge-off with the creditor, especially if it was reported in error. However, even if the charge-off remains, your credit score can gradually recover as you build positive credit activity over time.

How To Avoid Charge-Offs Caused by Fraud

If a charge-off on your credit report is due to fraud, disputing it can help restore your credit health. However, you might also find new accounts or unauthorized charges on your existing accounts, which you might need to dispute to recover your funds. This process can be challenging because:

• Filing deadlines are strict, and missing them can leave you without options
• Dispute procedures vary by issuer, making the process unclear and confusing
• Supporting evidence like receipts or proof of the issue is required to back up your claim
• Investigations can take weeks or even months for dispute resolution

To help avoid fraud-related charge-off disputes, as well as disputes due to unauthorized charges, consider using virtual cards for your online purchases. These cards replace your actual payment details with randomly generated numbers, adding an extra layer of security to your transactions.

Choosing an independent virtual card provider like Privacy gives you additional control over your cards, allowing you to pause, cancel, or set spending limits on each card for additional payment security.

Privacy Cards—A Smarter Way To Avoid Disputes

Privacy is a BBB^®-accredited virtual card provider trusted by over 250,000 satisfied users. After linking your debit card or bank account, you can generate virtual cards with unique 16-digit numbers, expiration dates, and CVVs. These cards work like regular payment cards but shield your real payment card details, reducing the risk of unauthorized charges and billing errors.

You can generate three types of virtual cards with Privacy:

Privacy allows you to set custom spending limits to help avoid billing issues like hidden fees or duplicate charges. Any transaction exceeding your limit is automatically declined. You can also pause or close your virtual card anytime to avoid accidental charges, as Privacy will stop any charges to a paused or closed card.

Plus, if you encounter issues like receiving damaged goods or not getting a promised refund, Privacy can investigate and file a chargeback on your behalf, as long as there are valid grounds.

Additional Features Offered by Privacy

Privacy offers a variety of features to streamline the use and management of virtual cards, as detailed in the table below:

Getting Your First Privacy Card

To get started with Privacy and generate your first virtual card, follow these steps:

1. Sign up for a Privacy account
2. Provide your KYC details to verify your identity
3. Link a funding source (debit card or bank account) to your Privacy account
4. Request and generate your first Privacy Card

You can opt for one of the four monthly plans Privacy offers, as detailed in the table below:

References

^[1]Equifax. https://www.equifax.com/personal/education/credit/report/articles/-/learn/charge-offs-faq/, sourced February 4, 2025

^[2]HelpWithMyBank. https://www.helpwithmybank.gov/help-topics/debt-credit-scores/credit-scores-reports/credit-reports/credit-report-how-long.html, sourced February 4, 2025

^[3]Experian. https://www.experian.com/disputes/main.html, sourced February 4, 2025

^[4]Transunion. https://www.transunion.com/credit-disputes/dispute-your-credit, sourced February 4, 2025

^[5]Equifax. https://www.equifax.com/personal/credit-report-services/credit-dispute/, sourced February 4, 2025

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