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CNN.com delivers up-to-the-minute news and information on the latest top stories, weather, entertainment, politics and more.Charge-offs are actually debts that were categorized as uncollected for tax purposes. A Creditor would be allowed to consider them as business expense instead of profit. Although these charge-offs are bad debts, the Creditor is still allowed to demand payment directly or using collection agencies. In some cases where the amount of debt involved is quite high, then a lawsuit might be filed.
In order to avoid charge-offs, you should remember these things.
Pay Bills on Time
A charge-off meant you did not pay your debt for approx. 180 days. Many people find themselves with a charge-off on their Credit history just because they were not responsible enough when it comes to managing their bills. Some of them find out too late that they have a charge-off for something they could have paid off easily. You must be able to set aside a certain day in a month to pay your bills and do some accounting. Do this without any distractions so that you will not forget anything.
Speak with Your Creditor
If you are experiencing financial difficulties and have missed payments because of this, you should make an effort to speak with your Creditors. Most of these Creditors would welcome all attempts from their clients to make payment arrangements and they actually have amnesty programs, which are designed to help out their clients. You should make sure that you only agree to payment terms that are realistically affordable. You must never commit into something that you know is not possible.
Review Finances
The best way to avoid charge-offs is to make sure that you are living within your means. You should review your income and check in what areas you are spending too much money. If your charge-offs can be paid in full after you have made the necessary adjustments, then pay it. On the other hand, if it would be difficult for you, then come up with a realistic amount, which you will offer to your Creditor.
All these helpful tips can help you easily avoid charge-offs in the future. Without any charge-offs in your Credit history, you will not have any problems applying for mortgages, car loans, Credit cards and any other transactions that would require you to have a good Credit score.
If in case you already have a charge-off on your Credit report, you should do whatever it takes to have it removed. Or else, you would have to wait for seven years before these charge-offs are removed and during this time, you will have to suffer from many inconveniences.
To get boatloads of unique Credit tips and unusual resources such as Credit Tip Videos, Credit Dispute Software, E-Books, Articles, Blog, Etc. to help dramatically improve your Credit report and raise your Credit scores up to 250+ points please go to: Creditips.com/blog/index.php">( How to Avoid Charge-Offs)
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