Understanding What Charged-off Means

November 8th, 2017 | Author:

[I]f you’ve looked at your credit report recently, you may have noticed that an account says Charged Off. You may not be sure what that means for you and for your credit score. It’s an important term you should understand to help you improve your credit score.

A creditor will charge off your account if you fail to make payments for a minimum time. Sometimes, it may be as little as six months. In other cases, it may be a year or some other period. The idea is that the creditor assumes you have no intention of paying your debt, so they have charged it off their financial records.

While the account may be removed from their records, it does not mean you don’t have to pay it. The creditor can pursue payment by selling your account or hiring a collection agency.

Once the account has been sold, it can appear twice on your credit report. It will show up first as the charged-off account. It can show up a second time under the collection agency. Having two negative items for the same account can do even further damage to your credit score. The collection agency may also show missed payments each month for the account when you don’t pay them.

The best thing to do if you have an account that has been charged-off is to pay the collection agency. If you don’t have the full amount, you can begin making payments. You can even try to negotiate a reduced amount to get the account settled quicker. Once you have completed your required payments, it will be marked as paid. The account will still show on your credit report for up to seven years, but it won’t continue adding negative information.

If you don’t pay, an account can be sold from one collection agency to the next, which means it can continue to hurt you for some time. However, with each new account, the timeline still goes back to the last time you made a payment and doesn’t start all over again.

Newest Answers

Why Your Credit Score Matters If You’re a College Student

November 17th, 2017 | Author:
h

[Y]ou don’t have much money and any you do have goes towards paying your college expenses. You may wonder why a credit score even matters at this stage of your life. If you haven’t given it much thought before, you need to become aware of it now. Your Future Depends On It Your credit rating […]

Continue Reading »

What You Should Know about Credit and Car Insurance

November 15th, 2017 | Author:
h

[I]f you have poor credit, you probably know it will impact your ability to get a credit card or loan. However, it can also influence how much you will pay for car insurance. The connection between credit rating and car insurance may seem odd to consumers, but it is an essential combination for insurers. Taking […]

Continue Reading »

What You Need to Know about Disputing Information on Your Credit Report

November 13th, 2017 | Author:
h

[I]f you check your credit reports, there is a good chance that you might find an error. Statistics show that one in five credit reports contain errors. That’s not good news for consumers who rely on credit reports for new credit and loans. However, you can dispute any errors and get them corrected. How to […]

Continue Reading »

What You Must Consider about Consolidating Debt

November 10th, 2017 | Author:
h

[Y]ou have a hard time keeping track of the bills you have to pay. With multiple credit cards and more than one loan, it’s a wonder you keep it all straight. You may wonder if a debt consolidation loan is right for you. Before you go this route and try to find a way to […]

Continue Reading »

Understanding What Charged-off Means

November 8th, 2017 | Author:
h

[I]f you’ve looked at your credit report recently, you may have noticed that an account says Charged Off. You may not be sure what that means for you and for your credit score. It’s an important term you should understand to help you improve your credit score. A creditor will charge off your account if […]

Continue Reading »

Start Saving for the Holidays Now

November 6th, 2017 | Author:
h

[I]n reality, you should have a savings plan all year long for the holiday season. However, it’s never too late to start. Whether you buy gifts for a lot of people, host dinners or just go out and enjoy all of the holiday activities, it usually costs a lot of money during this time of […]

Continue Reading »

How Unemployment Benefits Can Help

November 3rd, 2017 | Author:
h

[W]hile you may be aware of unemployment benefits if you lose your job through no fault of your own, you may not think you qualify or will be able to get them. However, they can be a lifeline until you are back on your feet with a new job. File ASAP Many people don’t get […]

Continue Reading »