Why is this ‘charged off’ debt on my credit report?

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Q. I am trying to improve my credit. I have student loans that are old and have been written off. My credit report shows them as a zero balance but 120 days past due. Can these come off my credit report?
— Trying

A. We’re glad you’re taking steps to clean up your credit report.

You didn’t say how old the charge-off is, but loans that were written off remain on credit reports for seven years or more.

After the creditor marks the loan as charged off, it can sell the loan to a collection agency, which could be reported as a separate account on your credit report, said Deva Panambur, a certified financial planner with Sarsi, LLC in West New York. and adjunct professor of personal finance at Montclair State University.

Collections remain on your credit report for seven years from the original date of delinquency, after which it rolls off your report, he said.

“If you have negotiated a debt settlement or if the loan has been forgiven – both of which have a relatively lower impact on your credit score than loans that have been charged off – then you can negotiate with the creditor to have the loan reported as paid in full,” Panambur said.

If you have errors on your credit report, you can dispute the items with the credit bureaus. Learn more about how to do that here.

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This story was originally published on June 6, 2019.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.