When a creditor takes a charge-off, that means that they have taken the accounting measure of moving the delinquent debt from the "accounts receivable" column of their accounting ledger over to the bad debt/non-asset column of their accounting ledger. It thus no longer appears as an asset.
The basis for that accounting process is their determination that the debt is not likely to be paid, usually based on a long period of delinquency.
Fed regs set 120-180 days late as usual basis for making the determination that the debt is not likely to be paid, and thus must be charged-off.
The month/year of reporting of a charge-off is not the date they did the charge-off, it is only the date they chose to report that fact to the CRA.
The creditor is not required to report the date they did the actual accounting, as it is irrelevant to credit reporting.
Showing of CO in 02/2012 means only that it was charged-off at some prior time, not that it was charged-off that month.
The only credit reporting requirment is that once they have reported a CO, they must then report the date of first delinquency (after which the debt remained delinquent) to the CRA no later than 90 days after reporting of the CO. That DOFD then sets when the CO must become excluded from the consumer's credit report.
Any CO,paid or unpaid, becomes excluded no later than 7 years plus 180 days from the reported DOFD.
If the consumer subsequently pays the debt after it was charged-off, then the currrent status is updated to paid, but that does not result in removal of the CO.
The CO still remains under Payment History, even though it is no longer the current status, and becomes excluded once it reaches its credit report exclusion date.
