Charge-offs and Collections are among the most common negatives found on the credit reports of consumers. It begins with a credit card account that got way out of control and you stop paying the bill. The credit card company will begin collection efforts for a few months and eventually maybe even offer you a settlement.
IF they are unable to recover any of their funds in a lot of cases they will sell the account to a third party collection agency which is when it becomes a charge-off and then eventually a collection account. This is the point when you sometimes begin receiving annoying calls from collectors.
The best way to put such accounts behind you is to settle with the company when they initially offer you a settlement. A lot of times it is significantly lower than the original total balance, in a lot of cases 70% less. This means that on a $1000 debt you could be offered a settlement in the amount of $300.
You want to take this settlement BEFORE the account is sold to a third party collector. If it has already passed this stage then you want to deal with the collector directly. Simply offer them an amount of money to settle the debt, which should be a lot lower than what they want you to pay.
Remember the worst has already been done so you have nothing to lose by offering them a lesser amount. A few months after the settlement has been completed you want to dispute the entry on your credit report if it has not been updated. This should allow the deletion of the account from your reports.