An effective way of erasing a charge off from you credit history is to dispute the listing. This is accomplished by sending a credit repair letter to the credit bureaus.

In your credit repair letter you should explain why the listing is incorrect. For example the account has never been paid late, it's not your account or information is wrong.

The way our credit system works is you are guilty until you prove your innocence. What I mean is the incorrect information is true until you prove otherwise.

In response to incorrect information being reported congress passed the Fair Credit Reporting Act. This says that any listing that can not be verified must be removed from your credit report by the credit bureau.

It is not un-common for one charged off account to result in many negative listings and a ruined credit report. Let me show you the process of what happens to a charged off account.

The delinquent debt is sold to a collection agency by the original lender. Then the collection agency tries to collect payment from you. If they can not then they will report a new negative listing on your credit report.

The collection agency will then sell your account to another collection agency. The new agency will also try and collect and if unable they will report yet another new negative listing.

This process will continue through any number of collection agencies. It depends upon the size of the delinquent account. You can see how one account can ruin your credit score and turn into multiple negative listings.

If you have many negative listings it will cause your score to go way down. It will also be difficult to get approved for new lines of credit.

This is good to know before you pay an outstanding bill because payment does not mean that the listings will be removed. Instead I would recommend disputing the charge off before you take any step to repay the debt.