topic Re: Charge off question in Rebuilding Your Credit

Charge off question

tbea1004 — Fri, 11 Dec 2015 23:54:07 GMT

I have a couple accounts on my credit reports that are not listed as collection accounts but are charge off accounts. What exactly does charge off mean? Do they need to be deleted or do they affect my credit score?

Re: Charge off question

Anonymous — Sat, 12 Dec 2015 00:04:56 GMT

I will let others answer in detail what it is..But it is the worse thing to have on a credit report...

Re: Charge off question

gibeon — Sat, 12 Dec 2015 00:06:56 GMT

They definitely count negatively towards your scores. How much is determined by how long it has been since they were first reported as charged off.

Charge off means that they have written off the money you owe them as uncollectible and that for accounting reasons they are assuming they will never get the money.

They may have sold your debt to a collection agency as well.

Youay be able to get a Pay for Delete agreement to ha e the COs removed from your reports, but that would depend on a lot of factors.

Re: Charge off question

RobertEG — Sat, 12 Dec 2015 00:08:21 GMT

A charge-off is the reporting by the creditor of having taken the accounting measure of moving your debt from an expected asset (account receiivable) to an expected loss.

It does not affect the consumer's continued obligation for the entire debt, or the ability of the credtior or debt collector to continue to attempt to collect the full amount.

The creditor can then take the business loss as a tax reduction in their next filing with the IRS. The charge-off is thus by the creditor agaisnt their assets, and not a write-off by the consumer.

Taking a CO is normally required under federal regs in order to prevent businesses from overstating their real assets by padding their financial statement with assets that most likely wll not be collected. I protects shareholders, investors and potential purchasers from financial deception.

A charge-off has a required credit report exclusion date of no later than 7 years plus 180 days from your date of first delinquency on the account, where you threafter remained delinquent untilt they took the charge-off. It is a major derog in credit scoring.

If the creditor either assigns the debt to a debt collector for collection assistance or sells the debt, the debt collector can then also report a collection.

Any previously reported CO can remain, and thus you can have both a CO and collection simultaneously reporting on the same debt.