What does "account charged off" mean on a credit report?

Question

I finally got a friend of mine to take a look at her credit report since she doens't pay any of her credit card bills and hasn't for awhile. We got her report and there are some things we aren't sure what they mean.

Here is what one account looks like:
"Account charged off/Past due 150 days. $979 written off. $197 past due as of May 2005."

"This account is scheduled to continue on record until Aug 2011."

"Recent Balance: $979 as of 05/2005"

"Account history: Charge Off as of May 2005
180 days as of May 2005
150 days as of Apr 2005
120 days as of Mar 2005
90 days as of Feb 2005
60 days as of Jan 2005
30 days as of Dec 2004, Jan 2003, Oct 2002"

So what does the whole charged off thing mean? And where it says it will stay on record until August 2011, what does that mean? She thinks it might mean she won't have to pay it after that? Like it will go away from her report?

Any help would be appreciated! Thanks!

Answer 1

"Charged off" means that the creditor was unable to collect and has written off the debt. In other words, they think your friend is a deadbeat and will never pay. The "on record until August 2011" means that this will stay on the credit report until at least 2011. So, any potential creditors who run a credit check will see that your friend doesn't pay her debts.

Answer 2

Charge Off Definition

Answer 3

It basically means that she did not pay on it and it was charged off by the company but that you still do owe it. Bad mark on her credit report. These charge offs stay on her report for up to 10 years I believe or it may be 7. Most likely, these credit card companies have already turned these accounts over to a collection agency which will also go on the credit report.

Answer 4

The creditor has "Written off the amount as a bad debt".

This means that the creditor will no longer pursue collection. However, if a "Collection Agency" should discover the bad debt, and sometimes they do, with an agreement by the creditor, they may try to collect the debt. If any collections are obtained by the Collection Agency, they retain 1/2 or more and return the balance to the creditor.

The amount will remain as an unpaid debt on your credit reports until 2011. After that it will be disregarded.

Answer 5

That means the original company she owed the debt to thinks she's not going to pay it. They sold the debt to a collection agency who will now try to get it from her.

Aug. 2011 is seven years from the date of last activity on the account. That means that black mark will remain on her account until then (significantly lowering her credit score) If your friend ever wants to have good credit, tell her to contact the collection agency who has her debt, work out a payment arraingment with them or just pay them off if she has the money, and to get an agreement (in writing) that they will take the collection off her credit record.

If she doesn't, if she ever wants to get a credit card, a car loan, a mortgage, or even good insurance rates, it's not going to happen and she's to end up paying through the nose for all that.

Answer 6

What Does Charge Off Mean

Answer 7

Usually that means that she paid a fraction of the charges and they for gave the rest. Or sometimes if the amount is small enough they will charge it off without collecting anything because it would cost them more money to pursue it than to just forgive it. It still is a bad thing to have in your credit report.

I assume where it says in will remain on record til 2011, that is how long it will show up in a credit check, but I'm not sure of that one.

Answer 8

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RE What does "account charged off" mean on a credit report?

I finally got a friend of mine to take a look at her credit report since she doens't pay any of her credit card bills and hasn't for awhile. We got her report and there are ...show more

Answer 9

The real question is there a minimum amount 2 put on somebody credit report for a dumb charge-off. I got 1 or 2 and the amount are simple, 30-40$. Deal with major creditors who will know to overlook this, and see the big picture.

Answer 10

It could mean one of two things. First it would take them too much time and money to try and collect so they just gave her negative points on her credit score that will lower it until 2011. Or it could be this and I've faced it. They write it off, turn it over to a collections agency who in turn jacks up the charges, late fees, etc, rings your phone off the hook etc. and it ruins your credit score, reputatoin, and any chances of getting a loan or a new credit card in the future until you pay it off and then you still have the negative points until the 5 or more years are up. GRR. Be careful with your scores and reports people. Check them yearly. And if you need help go see your local CPA for assistance.