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Old Charge Off

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Anonymous
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Old Charge Off

I am new here, so sorry if this question has been asked and answered repeatedly. Recently my husband and I decided to pull credit reports for my husband as we hadn't pulled one for him since we've been married. There is one negative account, and it is a credit card showing charged off in 2012.  He has since then had other successful credit accounts and his credit score isn't awful, but its not amazing either. 

My husband said he believed he paid the entire credit card off in full in 2012, although he did have some late payments prior to paying it off. The charge off shows a charge off amount of $1473. In the comments it says "Account paid for less than full balance, charged off account." I am new to reading these, so does that mean we owe then $1473? Or is it that he did owe that much when they reported it deliquent, and then he paid it off but they just didn't delete it?

 

Any advice here interpreting/ and remedying the situation would be greatly appreciated.

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1 REPLY 1
RobertEG
Legendary Contributor

Re: Old Charge Off

A harge-off is an accounting measure taken when a debt becomes delinquent to the degree that it is not expected to be paid.

It moves the debt from a receivable asset in their accountng books over to a bad debt.

 

Taking of a charge-off does not affect the coontinued liability of the consumer for the entire debt.  It can be looked at for credit reporting purposes simply as the addition to the consumer's report ot a statement that they are not expected to pay the debt.

The amount of the debt at time of their CO is retained for review by others, but does not indicate whether the consumer ultimately paid.

Paid for less than full balance indicates that the consumer settled the debt, but did so by acceptance of the creditor of less than the full amount of the debt.

There is no more debt, and the account should thereafter show a current balance of $0, but the amount that was charged-off still remains for historical purposes.

That reporting is good in that is showns that the consumer discharged the debt, but bad in that it shows that the creditor took a net loss in dealing with the consumer.

 

The CO must be excluded from the consumer's credit report no later than 7 years plus 180 days from the reported DOFD on the account.

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