Hey everyone.
I'm new to the forum, and have spent some time researching about how charge-offs work, but still don't know everything about how it all works. Here's my story:
In 2016, I started my first semester at college. I had a debit card through Bank of America, and didn't know much about actual credit cards. So after a few months, I decided to apply for Bank of America's Secured Credit Card. I figured it would be a good way to start building some credit. At the time, I was a student with no job, but I had some money saved up. I put down the required $300 security deposit and started using the card. I tried not to use it too often, and paid all the monthly payments on time for the first 5 months.
Then the next semester came around. I was going to take up a job on campus so I would have guaranteed money to make they payments, but I did not end up doing so. As a result, I missed the next 5 payments. I wasn't aware of the negative consequences at the time and possibility of charge-offs, I just thought they would charge a late fee each month and I'd pay it all off with a summer job.
May came around, and I discovered that my account had been closed. Since I had put down that initial security deposit, I thought that was that and ignored it. Keep in mind, my billing address was at home and I was at school, so I did not know if I was getting any sort of documentation from Bank of America. Late in the summer, I signed up for Credit Karma, and was surprised to see a charge-off on the secured credit card. The amount charged off is a little over $100, which I assume is the accumulation of late payment fees on the account over those 5 months.
I tried to do some research on how to get charge-offs removed, and put the issue on the back burner until recently. What would you all advise doing in this situation? I see some people recommend contacting the creditor (listed on Credit Karma as Bank of America), and some saying it won't matter if I pay it off (which from my research is BS, you can get sued if you don't pay it off). For what it's worth, the charge off really tanked my credit score (down to 550 range). I have not received any calls or notices from any debt collection agencies over the 7 months that it's been charged off for.
Thanks!
