How Do I Get A Charge Off Removed From My Credit Report?

By Tevait Feanle •  Updated: 05/02/24 •  5 min read

Life, as they say, happens. Despite your best plans and intentions, and no matter how good your financial acumen and general behavior with money, things can easily upset your plans. A great example would be the enduring impact that sudden, unpredicted COVID job losses and the extended lockdowns have had on South Africa’s workers. 

Whether you’ve damaged your credit score through mismanagement of your debt, or whether there was a good reason you lost control of an account, what matters most is fixing the issue and rehabilitating your credit score for the future. Today we will look at charge-offs, often called defaults in South Africa, in more detail, how they impact your credit score, and what you can do to reduce that impact.

How Do I Get A Charge Off Removed From My Credit Report?

Unless the default, or charge-off, is erroneous, false, or has expired and not been removed from your credit report, you are unlikely to have much success challenging it. The idea of a credit score is, after all, to reflect the current state of how you manage your debt. If it is a legitimate outstanding amount that is due, you will have to take ownership of that and do what you can to fix it.

The best, and quickest, way to remedy the situation is to speak to the lender (or likely collector, in the case of a charge-off) and organize a payment plan. Most debt collectors will negotiate payment plans, and they may also offer to write the debt off entirely for a much lower lump sum if you can pay one. While this will not entirely erase the impact of the original charge-off, seeing that there is a remedy in hand, or having the debt cleared entirely from your record, will be the best way to salvage your credit score. 

Do Charge-Offs Go Away After 7 Years?

A charge-off, also called a default in South Africa, happens when a lender has had such difficulty collecting your owed debt that they ‘write it off’. This often means selling the debt on to a collections company, which can be scary for the debtor. 

Defaults have one of the biggest impacts on your credit score because you handled the loan so poorly that the lender was unable to make a payment arrangement or collect any money from you for an extended period vastly outside the loan terms. They will typically impact your credit report for 2 years, and if the matter goes to court judgment, will last up to 5. 

So this means there is a finite period during which the impact of a default can affect your credit score. However, that doesn’t mean your obligations magically disappear with it, especially if a court judgment is involved, which will stay fresh and relevant until you address the matter to the court’s satisfaction. 

How Do I Remove A Charge-Off From Written Off?

Once a lender has ‘written off’ your debt, they are no longer making any attempt to collect on it. In all likelihood, the credit line will be terminated at the same time, meaning you can no longer use it. That doesn’t mean it will disappear, however. At this point, the lender will either decide to head to legal action (the move used for most major debt) or sell the debt to a debt collector, which is done for smaller amounts. 

What Happens If You Don’t Pay A Charged-Off Account?

In South Africa, once your debt is ‘charged off’ by the lender, this is the point where most lenders will stop trying to collect the debt. That doesn’t mean you are scott-free, however! In most cases, they will then sell the debt on to a debt collector. While these entities operate legally, they will employ underhand scare tactics to try and collect on the debt. Additionally, they can also report failures to stick to the agreement to the credit bureaus, amplifying the issue. 

You should realize that debts become ‘prescribed’ in South Africa after 3 years with no acknowledgment or payment on the account. This means that most debts are uncollectible after 5 years. However, this hinges on the collecting entity receiving no acknowledgment or payment from you, or the clock will start again. It is also risky, may instead lead to legal action against you, and can open up a ‘can of worms’ in the form of harassment and attempt to collect on the debt that will be ongoing.

How Long Does A Charge-Off Stay On Credit Reports?

A standard default that is then sold on to a debt collector and remedied by the lender will stay on your credit report for 2 years in South Africa. If the matter goes as far as the courts, it will impact your credit report for 5 years. 

Rehabilitating charge-offs, defaults, and judgments can be a scary part of taking control of your financial position. However, ignoring the matter is often far worse, and will have more repercussions. Your best course of action will always be speaking honestly to the lender about your financial situation, and see what plan you can make to move your situation forward.