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It sounds harsh, and it can have a real impact on your financial life.
So what is a charge-off, really?
Does it mean youre off the hook for the debt?
Can it be fixed?
And how does it affect your credit?
Charge-Off Meaning: What Does It Mean?
It doesnt cancel the debt youre still legally obligated to pay it.
Its considered worse than delinquent because the creditor has given up collecting the debt through the normal billing process.
Charge-offs usually occur within 120 to 180 days of nonpayment.
But what does charge-off mean for your credit score?
A charge-off stays on your reportfor seven yearsfrom the date of your first payment that led to the charge-off.
However, it usually affects your score less over time.
When applying for credit in the future, lenders often view charge-offs as a red flag.
It suggests high-risk behavior with money and poor credit management.
Charged Off as Bad Debt: Do You Still Owe the Money?
Many people asking What is a charge-off assume it means you no longer owe the debt.
If the debt goes to collections, youll have to contact and pay them instead of the original creditor.
Can You Remove a Charge-Off from Your Credit Report?
If you find an inaccuracy, you canfile a disputewith the credit bureaus reporting the incorrect information.
ensure to provide any documentation that supports your claim.
However, its pretty rare for a creditor to agree to this.
Some creditors may even settle the account for less than the full balance.
You could also try negotiating a pay-to-delete agreement.
However, its unlikely to work due to reporting requirements from the major credit reporting agencies.
When negotiating with the creditor, check that to stay polite and professional.
confirm to include the written agreement you requested from the creditor as proof.
Its a red flag on your credit report but it doesnt mean youre out of options.
Whether you pay it, settle it or challenge it,taking action is better than letting it sit.
Quick recap:
If youve got a charge-off, dont ignore it.
Face it head-on and start taking steps to get your credit back on track.
FAQ
Information is accurate as of April 24, 2025. you might learn more about GOBankingRates processes and standards in oureditorial policy.
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