A credit card charge off occurs when a credit card issuer no longer believes the outstanding debt to be an asset. While no new fees and, in rare cases, no annual fees will be added onto the outstanding balance, the charge off status is reportable to credit bureaus and can affect your credit score. If you have a charge off on your account, there are several steps you can take to improve your credit score. Your next action must be part of an overall plan that improves your credit history.

The first thing you need to do if you are hit with a charge off is to notify the credit card company and let them know your situation. In many cases you will receive a reply from the company indicating that they have the right to charge you a late fee and other charges if they feel the account is not paid on time. You should then attempt to resolve your own problems with the credit card company, but it is always a good idea to discuss your problem with a credit report agency as well.

Your next step should be to pay off the debt as quickly as possible. This means you need to come up with a plan that details how you will pay off the minimum payment. If you are having trouble making your monthly minimum payment, the best approach may be to increase your minimum payment until you have completed paying off the entire debt. This shows the credit report that you are serious about paying off the debt and shows them that you are responsible with your finances.

Once you have done everything you can to repay your debt, it is important that you start boosting your financial wellness. A good way to do this is to get involved with your local community and volunteer at a local charity. Not only will you be making a difference in your community but you will also be making a difference in your credit card charge off situation. The credit bureaus are not the bad guys, they are just looking out for themselves.

Once you have repaid your debt in full and met with your financial advisor, your next step should be to negotiate a payment plan with the credit card issuer. It is imperative that you follow through with this plan. Don’t allow the creditor to take advantage of you by increasing your interest rate. Work with them and make an arrangement that is agreeable to both parties. Your goal should be to get to an agreement where you pay a lump sum amount in full and you pay the balance in full over a period of one to two years. If this agreement sounds good to you then you should contact your creditor directly to see if you can accomplish this agreement.

Another way that you can help reduce the number of credit card charge-offs on your credit report is to start paying your bills on time. If you don’t have any kind of emergency fund set up then you need to make every effort possible to make your payments on time. You want to work hard to build up your credit rating to ensure that it is as high as possible so that when you apply for credit in the future you will be approved.

If you find that you cannot avoid being charged to you then you need to get in touch with your credit card issuer to try to work out a payment plan. There are some lenders that will work with you and negotiate a reasonable payment plan. But you have to contact them within 180 days of the date that the check was written to see if you can work something out. Don’t wait for 180 days to find out that you cannot pay back your debt because that could cause more damage than good. Let the lender know in writing that you cannot afford to pay the money back. Then you should move on to finding another lender that will issue you a loan.

If you have not been able to work out a payment plan and you do not have any way to get caught up on your credit card charge-offs, then you need to take action and contact your credit card company to find out what your next steps are. Don’t ignore the charges on your credit card because those charges may become part of your permanent record. Every time you miss a payment or you fail to make payment on time, all of that information will remain on your credit report until you pay it off. Even if you manage to find a way to pay the entire amount of the charge-off, the damage is already done and you will find it very difficult to re-establish yourself. So take care of business, make your payments on time and you will soon be able to once again enjoy having a credit card.