Need Help Understanding a Charge-Off

L

lisa

New member
I just checked my credit report and saw something listed as a “charge-off,” and I’m honestly not sure what that means or what I’m supposed to do about it. It’s from an old credit card I stopped paying a while back when things got tough financially.

Does a charge-off mean I no longer owe the debt? Can it still be collected? And more importantly, is there anything I can do to remove it or lessen the impact on my credit score?
 
Totally get where you're coming from. I had one after losing my job in 2020. It tanked my credit, but I worked with the collector to settle it. It didn’t erase it, but paying it off helped my score slowly improve. You’re not alone in this.
 
A charge-off doesn’t mean your debt is gone. It means the lender gave up trying to collect it directly and marked it as a loss in their books. But yeah, you still legally owe it. They might sell it to collections. It hurts your score pretty bad but gets better over time.
 
Ugh, been there. I had a $900 charge-off on a Target card. Paid it in full, and my score jumped about 40 points over the next few months.
 
Same thing happened to me during the pandemic. I ignored it for too long, and then a collection agency started blowing up my phone. Don’t wait too long if it's still within the statute of limitations!
 
Helps slightly especially with manual reviews but FICO still sees it as negative. You get more credit for paid collections than charge-offs though
 
I managed to negotiate a charge-off from $900 down to $300 which felt like a win. But the lender wouldn’t agree to remove it completely it’s still on my report just marked as settled
 
Sometimes a polite request can go a long way. I reached out to the original creditor via email and they agreed to remove the tradeline after I paid full
 
Dealing with a charge-off was the moment it hit me financial literacy should’ve 100% been part of the high school curriculum. Instead I walked away knowing how to find the square root of a banana but not how to manage my money
 
I cleared my charge off just to get back at the collection agency that kept blowing up my phone during dinner. Petty? Maybe. But totally worth it.
 
It really depends on the bank some are a lot stricter than others when it comes to approving credit applications, especially if your credit history is limited or damaged. If you’re just starting out or trying to rebuild secured credit cards are a great first step

They’re designed for people in exactly that situation. Capital One and Discover tend to be more forgiving and flexible with their secured card approval process even if your credit isn’t perfect. Start there use the card responsibly and it can open the door to better options down the line
 
Been there, done that. My credit took a nosedive after a charge-off. Paid it eventually, but the mark stayed for 7 years. 😩 Definitely try negotiating a pay-for-delete if it’s recent.
 
Been there, friend. Had one from Capital One. Ended up settling for 40% of the original amount. Didn’t remove it but at least it showed as paid and helped my score rebound eventually.
 
I had the same thing happen during COVID. Life just got too hard financially. I ended up settling the debt for less than owed. It stayed on my report for 7 years, but after I paid it, lenders were way more willing to work with me again
 
Legally they can still try to collect unless it's past the statute of limitations in your state. Check that ASAP. You might not have to pay if it's too old.
 
It took getting hit with a charge-off for me to finally realize how badly we needed financial literacy classes in high school.

Instead of learning how to manage credit or budget properly i spent those years figuring out the square root of a banana useful in exactly zero real-life situations
 
I paid off my charge-off purely out of spite for the collection agency that wouldn’t stop calling me right in the middle of dinner every night.

It wasn’t about the credit score at that point it was about peace and petty satisfaction. And honestly it was worth every single cent
 
Do paid charge-offs still make it hard to get approved for credit cards even the smaller ones? Just wondering how much they still hold you back
 
Technically speaking a charge off is just an accounting classification not a legal erasure of the debt. The balance is still owed unless it’s been wiped out through bankruptcy
 
The best advice i ever received? Always make a settlement offer but be sure to get the agreement in writing first. Then keep an eye on your credit reports to make sure the update is reflected accurately
 
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