Is a closed account the same as a charge off?

Question

My credit company closed our account because we defaulted. On my recent credit report is shows "closed" but it still says past due even though we have made payments as agreed every month since the payment plan started. Is this a charge off? or not as bad as a charge off?

Answer 1

No, they are two different things.

A charge off is when the company writes off the debt because you will not pay it, sometimes they sell the debt to another company or collection agency to try to get the money from you.

What you have is not as bad as a charge off. In your case it sounds like they just closed the account so you cannot make any new charges on the account...it sounds like you have have some payments that are past due but you have worked out a payment plan and it will probably say past due until you finish making the payments you have agreed to. Once all the payments are made they will update your record to show that you are no longer past due.

Answer 2

The 2 are different. It likley says "Closed by Credit Grantor" or something like that, but it is NOT charged off since you're still paying on it. The minute you stop paying on the remaining balance, and they charge it off, that's when it affects your credit score. Right now, you're making payments so it is not -- in fact, it's likely helping your credit score (if you're current).

The only way it could hurt you is if your credit report was actually being reviewed by a human being who would read the "Closed by Credit Grantor" statement. Otherwise, computers today mostly evaluate credit on just about everything (except homes), and go primarily by your credit score.

Answer 3

"closed" is NOT the same as "charge off"

The months you missed will always show as past due even if you are currently making agreed-to payments.

Answer 4

It's not a charge off yet. As long as you keep paying you will be fine. It's not quite as bad as a charge off as far as your credit report is concerned.