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When you fall behind on credit card payments, you may notice a small charge being applied to your account. This annoying dent in your wallet is known as a chargeoff and can potentially ruin your financial profile. Even though your bank may be taking a small amount of cash from you, they’re also taking small chunks of your credit score as well. However, when you do get charged for a delayed credit card payment, it’s important to know these 4 factors for paying it back:

1. You Still Must Pay Back Your Debts

You lender is owed the amount of money they gave you no matter the situation. Never think that you can escape the clutches of credit card companies by going into collections or declaring bankruptcy. Especially when it gets serious and the bank demands full payments along with dismantling your credit score.

2. You Will Be Paying That Debt Back to Someone Else

When a bank puts you in collections, they hire a collection agency to hound you for their money. When this occurs, you have to pay a collection agency instead of the bank directly. But watch out, collection agencies are prone to scamming young lenders and pocketing the money themselves.

3. Your Credit Score Will Decrease

One of the worst things about having an account charged off is the negative impact it will have on your credit score. This black mark will stay on your report for seven years. That mark and the missed payment record will seriously limit your future financial prospects. This will make it hard to take out loans, qualify for mortgages, and more.

There is, however, a way to soften this blow. Pay off the debt in full after it has been charged off. By doing this, the account will read that it has been “charged off and paid in full”. Lenders prefer to see this than a partial payment or no payment at all. As the old saying goes, it is better late than never.

4. There are Still Other Options

Always remember that there are other options. Think about meeting with a credit counselor or entering into a debt management program. They can help you work with your creditors to create a manageable plan for repayment so that you have a chance to get rid of your debt.

You also have the option of writing a letter of goodwill to your lender. This is only a viable option if the charge-off was caused by a temporary setback. This can include a medical emergency, a job loss, or something of that nature. Write the letter and ask them to remove the negative information from your credit report. Also, make sure to include the reason why you allowed the debt to accumulate and mention any good payment history you may have. You will still have to pay the debt, of course, but if they accept, you won’t have to deal with a negative mark that lasts for seven years.