Charge off

[cindyrella]

What is the name of your state? Massachusetts

Could someone please explain what a charge off is on a credit report. Thanks

 

[Ladynred]

"Charge-off" is an accounting function/term. What it means is that the creditor has written the account off as a bad debt and uncollectable. They move it from the performing (paying) side of their ledgers to the non-performing (not paying) side. For this they get a tax write-off - and you get a nasty mark on your credit for the next 7-1/2 years.

Charge-off usually occurs after 180 days of insufficient or non-payment on a credit card or 120 days on a written contract. Some creditors will charge-off before the 180 days mark, it all depends on their policies.