What a charge-off actually does to your report.

A charge-off sounds final and a little frightening, but it helps to know exactly what it is and what it is not.

• What it is. A charge-off happens when a creditor decides a debt is unlikely to be paid, usually after about 180 days of missed payments, and moves it off their active books for accounting purposes.
• You still owe it. A charge-off does not erase the debt. It often gets sold to a collection agency, which is why a single debt can sometimes appear twice on a report.
• How long it lasts. It is a serious negative mark and generally reports for about seven years from the original date of delinquency, not from the date it was charged off.
• It can be addressed. Verify that the dates and amounts are accurate, watch for the same debt being reported twice, and challenge anything that is inaccurate or unverifiable.

A charge-off is a setback, not a dead end.

If you have one on your report, the first moves are accuracy and a plan, and that is exactly what a review call is for.

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