What is a Charge off on a Credit Report?

What does A Charge Off mean On A Credit Report & How Can I Remove It?

What is a charge off on a credit report? Don’t assume that a charge-off is a good thing. It’s not. Creditors like regular and reliable repayments from the people who they have extended credit to. In this case, people making late payments are often penalized via penalties and/or late payment notices being registered against personal credit reports. However, consistently missed payments and failure to have people lenders have extended credit to repay at all, necessitates lenders to charge-off accounts. This is a lenders way of marking a debt as non-recoverable.

When a charge-off therefore appears on a credit report, it tells potential new creditors that a person has previously failed to service their debts. Few lenders will in this case choose to provide financial products and services to such a person in the future.

How Long Does A Charge Off Stay On My Credit Report? 

All this being the case, a charge-off is one of the main things to avoid when it comes to credit reports. A charge-off can stay on a credit file for 7 years and although a debt might be charged-off by a creditor, outstanding debt amounts will usually be sold to debt collection agencies who will pursue collection of the debt much more aggressively.

What To Do About A Charge Off On A Credit Report

People with a charge-off on their credit file should in this case attempt to pay off the outstanding debt as quickly as possible. Successfully paid charged-off debts will be changed on credit reports to show future lenders that a debt was ‘charged-off paid,’and in doing so demonstrate that you did in the end meet your obligations to pay your debt in the end. Charged-off notices will however, still remain on credit reports for up to 7 years from the original date of delinquency.   

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