Credit Lingo

Glossary of credit terms


Charge off


Charge off means that the credit grantor wrote your account off as a loss, and it is closed to future changes. When an account displays a status of charge-off, it means the account is closed to the future use, although you still owe the debt.

If you pay the account, it will change status to be paid charge off. The charged off account will stay on your report for 7 years from the initial late payment.

Most creditors sell the charged off accounts to a collection agency for a percentage of the account's value. If that happens to you, a new account for that collection will be reported to the credit bureaus. You would then be responsible to only pay the collection agency.

Both the collection account and the charged off account will be deleted at the same time based on when the account went negative.