Will charge offs on my credit affect my ability to take out a personal loan?

Q: In the past couple years, I have had 3 charge offs on my credit (one is a cable bill and the others are credit cards). If I pay them off, how much will they affect my credit and my ability to get a personal loan?

A: There are many aspects to this question and the answer is complicated. Charge offs and collection accounts occur when a consumer defaults on a credit extension or a due payment. After a period, the debt or account goes to charge off or collection. Many consumers assume that a charge off means that they no longer owe the debt to the creditor, but this is NOT the case. If you have this type of derogatory, your credit score will be very poor, even after you settle any portion of it, or even the full balance. Negative credit can stick for 7-10 years, depending on what type of delinquency you have. Charge offs and collection accounts will typically cause scores to drop by hundreds of points, and remain low for long periods of time inflatable slides.

In situations like this, it’s best to speak with a credit expert and get feedback on what strategy is best for your unique credit profile and future goals. The only thing that I can say to you without seeing and discussing your full credit reports is that charge offs and collections are devastating to credit, even if paid. They can sometimes be removed or changed depending on the situation and circumstances surrounding the event. Traditional personal loans happen to be one of the toughest types of credit to get approval for, and credit will be a major factor in that approval process.Jule gummibåt

Filed Under: Credit