What Are Charged Off Accounts and Can They Be Removed?

A charge-off is one of the most damaging items that can appear on your credit report — but it is also one of the most misunderstood. Here is what you need to know.

What Does Charged Off Mean?

A charge-off occurs when a creditor decides a debt is unlikely to be collected — usually after 120-180 days of non-payment. The creditor writes it off as a loss for accounting purposes. Importantly, a charge-off does NOT mean you no longer owe the debt. The creditor can still collect it or sell it to a collection agency.

How Much Does a Charge-Off Hurt Your Score?

A charge-off can drop your score by 50-150 points depending on your starting score and overall credit profile. It stays on your credit report for 7 years from the date of first delinquency.

Can a Charge-Off Be Removed?

Yes — if it contains errors. Check the reporting carefully. Wrong dates, wrong amounts, account not yours — all are grounds for dispute under the FCRA.

Yes — through a pay-for-delete agreement. Some creditors will agree to remove the charge-off from your report in exchange for payment. Get this agreement in writing before paying.

Yes — if it is unverifiable. If the creditor cannot verify the account details during a dispute investigation, it must be removed.

No — if it is accurate and verifiable. Legitimate credit repair companies cannot promise to remove accurate, verifiable charge-offs. Be skeptical of anyone who does.

CreditGM offers a free analysis of your charge-off accounts to determine what is disputable and what strategy makes the most sense for your situation.