620 Credit Score: How to Deal with Charge-Offs

A 620 credit score sits in the "fair" range—not terrible, but not great either. If you’re dealing with charge-offs, that number can feel like an anchor dragging you down. Charge-offs are one of the most damaging marks on your credit report, signaling to lenders that you defaulted on a debt. In today’s economy—where inflation, rising interest rates, and financial instability dominate headlines—rebuilding credit is more crucial than ever.

Understanding Charge-Offs and Their Impact

What Is a Charge-Off?

A charge-off occurs when a creditor writes off your unpaid debt as a loss after 180 days (about six months) of non-payment. This doesn’t mean you’re off the hook—the debt still exists, and the creditor may sell it to a collection agency.

How Charge-Offs Affect Your Credit

Charge-offs stay on your credit report for seven years from the date of the first missed payment. They severely hurt your credit score, making it harder to:
- Get approved for loans or credit cards
- Secure favorable interest rates
- Rent an apartment or land certain jobs

With a 620 score, you’re already in a tricky spot. Charge-offs can push you into the "poor" credit range (below 580), limiting financial opportunities even further.

Steps to Handle Charge-Offs and Improve Your 620 Credit Score

1. Verify the Debt

Before taking action, ensure the charge-off is accurate. Errors happen, especially with sold debts. Request a credit report from AnnualCreditReport.com and dispute any inaccuracies with the credit bureaus (Experian, Equifax, TransUnion).

2. Negotiate a Pay-for-Delete

Some creditors or collectors may agree to a pay-for-delete, where they remove the charge-off from your report in exchange for payment. This isn’t guaranteed, but it’s worth trying. Get any agreement in writing before paying.

3. Settle the Debt

If pay-for-delete isn’t an option, settling for less than the full amount can still help. While the charge-off remains, a "settled" status looks better than "unpaid."

4. Rebuild Credit Strategically

With a 620 score, focus on positive credit habits:
- Secured credit cards – These require a deposit but report to credit bureaus.
- Credit-builder loans – Designed to help improve credit scores.
- On-time payments – Payment history is 35% of your FICO score.

5. Monitor Your Progress

Use free tools like Credit Karma or your bank’s credit monitoring service to track improvements. It takes time, but consistency pays off.

The Bigger Picture: Credit in a Volatile Economy

Today’s financial landscape—marked by high inflation, layoffs, and rising debt—makes credit repair even more urgent. A 620 score with charge-offs could mean:
- Higher auto loan APRs (think 10%+ instead of 4%)
- Denied mortgage applications in a tough housing market
- Difficulty refinancing student loans amid rising rates

By tackling charge-offs head-on, you’re not just fixing a number—you’re securing financial flexibility in uncertain times.