Financial uncertainty is common nowadays, and this can lead to difficulties with making debt payments. When you fail to make a payment on a debt for multiple months, you are at risk of a charge-off.

What does a charge-off mean? This guide from Carolina Title Loans, Inc. will explain what it is, how a charge-off affects your credit score, and how to go about resolving a charge-off in South Carolina. We will also explain how a title loan can help you during a financial emergency like missing multiple debt payments.

What Does A Charge-Off Mean?

If your creditor no longer believes that you will be able to repay the money that you owe, the company can choose to write off the debt as a loss. This will typically happen after you miss about six months of payments (in some cases, your account may get charged off earlier).

The account’s status and its outstanding balance will still appear on your credit report. It will also be marked as “potentially negative”. The fact that your account has been charged off does not mean that it will automatically disappear from your credit report.

Furthermore, you will still be responsible for repaying the amount.

How A Charge Off Affects Your Credit Score?

The charge-off itself is not the thing that hurts your score the most. It’s the missed payments and other negative items on your credit reports that have the potential to severely damage your credit. It’s essential to keep up with debt payments to avoid lowering your credit score and affecting your ability to get a home, car, or bank loan.

The following is how a charge-off affects your credit score:

• Late payments: Payment history accounts for 35% of your score. Once the debt is reported 30 or 60 days overdue, your credit will suffer the most. The longer you are overdue, the lower your score will drop, but that first impact will be the biggest one.
• Going over your credit limit: If you have to simultaneously deal with accruing interest, penalties, and late fees, your principal balance might exceed your credit limit. As credit utilization usually accounts for 30% of your score, going over the limit will damage it.
• The account getting marked as a “charge off”: This will hurt your score even more. The mark might also become a red flag for potential lenders in the future.
• The account will remain on your credit history for 7 years: Charge-off laws in South Carolina dictate that they stay on your credit history for seven years. Though the effect of the negative item can diminish over time, you will have to deal with the consequences of a charge-off for that time.
• The debt getting sold to a collection agency: If this happens, you will not only get bombarded with calls and letters, but the collection account will also appear on your credit report. This will have an effect on your overall score as well.

How To Remove A Charge-Off From Your Credit Report

Looking for how to remove a charge-off from your credit report can be difficult. Your best course of action is to make the payment as quickly as possible. If you manage to make the necessary payment, a note that the charge-off has been paid will be added to your report. Though this would still be a negative item, some lenders might not view a paid-off charge as a red flag.

You can always dispute it if you believe that the charge-off is inaccurate. If there really has been an error, the charge-off will either be corrected or removed from your report. Such disputes can take anywhere between 30 and 45 days to be resolved.

How do you remove a charge-off from your credit report if there is no error? You can try negotiating with the creditor. Some might agree to remove the charge-off once you pay off all the debt. To increase your chances of success, contact the creditor explaining why you weren’t able to repay on time (job loss, illness, etc.) and include proof.

Charge-Off Laws In South Carolina: Everything You Need To Know

A statute of limitations defines the time in which a lawsuit must be filed. In some states, the creditor will be allowed to file a suit even after 6 years have passed. In South Carolina, the statute of limitations is 3 years from the last activity on that account.

Despite the charge-off laws in South Carolina, creditors can still attempt to collect a debt even after the statute of limitations has expired. Debt collectors hired by the original creditor can also do that.

If you want to live a peaceful life and not get anxious every time your phone rings, paying off your charged-off account would be the best decision. After all, you are still legally responsible even for such accounts.

Charge-Off Vs. Collection Account: What Are The Differences?

When considering a charge-off vs. collection account, it’s essential to understand that one can lead to the other. A charge-off occurs when a creditor doesn’t expect to recover a debt and is about to send the debt to a collection account.

If you get a charge-off, a collection agency will not immediately look for the money to resolve the debt, but that is about to happen. It’s essential to start taking steps for resolving a charge-off in South Carolina to avoid debt collectors from hounding you for the money.

How A Title Loan Can Help With Resolving A Charge-Off In South Carolina

Resolving a charge-off in South Carolina is essential to avoid having your debt put into a collection account. However, paying off your debt can be easier said than done. You haven’t been able to make the payments for a reason, likely because you don’t have the money to afford it.

This is where Carolina Title Loans, Inc. can help with our title loans. South Carolina residents who have fully paid off their vehicles can get a title loan, which is a secured loan using your lien-free car title as collateral. Borrowers can receive up to $15,000, depending on their vehicle’s value.

Borrowers will only need three required items: your driver’s license or state-issued ID card, a lien-free car title in your name, and your vehicle for a quick inspection. You can start the approval process online and get approved the same day you apply at one of our South Carolina store locations.

The following are the steps involved in getting title loan cash to pay off debt:

• Submit your information through our online form
• Discuss title loan details over the phone
• Gather your required items and head to one of our store locations
• Allow the loan representative to verify your requirements and inspect your vehicle
• Sign loan documents to complete the approval process
• Receive your rapid cash the same day you apply or the next business day

Apply For A Title Loan To Resolve Your Charge-Off – Borrow Up To $15,000 Today!

Title loans can help you when facing a charge-off in South Carolina. You can borrow money in as little as one business day to pay off your debt quickly. The whole process can take less than 30 minutes and help you during your time of financial need. Contact us today for financial assistance by filling out our online inquiry form or calling us to discuss the title loan process.

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.