Once a creditor has taken a charge-off on a delinquent debt, that fact is not later negated by payment of the debt.
Taking a charge-off is an internal accounting measure that moves the delinquent debt from the assets column of their accounting ledger, thus providing a more accurate accounting of their true assets. It does not remove continued obligation of the consumer for the entire debt, and remains a factual process regardless of subsequent status of the delinquent debt.
Once you have paid the debt, the snapshot Current Status will no longer be reported as a delinquency status, such as 180-late or CO. It will be updated to paid or settled.
However, the CO remains of record, and continues to impact payment history scoring, whether paid or unpaid.
Removal of the reported CO can be attempted by a good-will request for deletion sent to the creditor.
There is no requirment for deletion based on subsequent payment of the debt. To the contrary, CRA policy clearly instructs creditors not to delete a collection based on subsequent payment of the debt. Thus, many creditors will refuse good-will deletions due to their credit reporting agreements with the CRAs in which they agree not to do so.
