This happened to me, and I know it has happened to several clients of mine as well. Here’s the scenario:

You have a credit card account that was charged off a couple of years ago. You assume (correctly) that it is hurting your credit scores. After sending a few rounds of dispute letters to the credit bureaus (Experian, Equifax, and TransUnion–the “big 3”), you are unable to get it removed. During those months that you are working through the dispute letter process however, your credit scores see a big jump. What happened?

You need to check all the information on that entry: date of last activity, date of first delinquency, and the monthly code for payment status (OK, 30 days late, 60 days late, 90 days late, or charged off).

Sometimes, negative information related to a charged-off credit card will be deleted without removing the account itself.

So instead of a card with a 30-day late payment in May, 60 days late in June, 90 days in July, and then a charge-off, it will just show the card with no payment history data.

Getting the negative information within the account removed has boosted your score. Just having the card listed there now may even be helping your score if you have an otherwise sparse credit report.

So you can use the “credit simulator” feature at FreeScoresAndMore (or whichever credit monitoring service you use–they should offer this tool) to simulate what would happen if the entire account disappeared from your credit reports. If you’ve had negative information within the account removed, don’t be surprised if that old charged-off credit card is now helping your score. If this is the case, leave it alone for now. As you build more credit, the impact of that account will lessen substantially.