Glossary term
Charge-Off
Short answer
A charge-off is an accounting step a creditor takes — typically after about 120 to 180 days of missed payments — declaring your unpaid account a loss on its books. It is not forgiveness: you still legally owe the debt.
Why it matters
A charge-off is one of the more serious negative marks on a credit report, and it generally stays for about 7 years from the date of the first missed payment that led to it. Charged-off debts are often handed to collection agencies or sold to debt buyers, so the same debt can show up twice — the original creditor's charged-off account and a separate collection account. Paying or settling a charge-off updates its status, which can help lenders reading the report, but accurate charge-offs cannot simply be deleted on demand.
Example
Maya loses her job in January and stops paying a credit card with a $2,400 balance. Around July, the issuer charges off the account and later sells it to a debt buyer. Maya's credit report now shows the card as "charged off," and a few months later a collection account for the same $2,400 appears. She still owes the money, the 7-year reporting clock runs from her first missed payment, and if the numbers or dates are wrong she can dispute them.
Terms used on this page
Guides that use this term
- How to Read Your Credit Report, Section by SectionA plain-English walkthrough of every credit report section — personal info, accounts, collections, public records, and inquiries — and what to verify in each.
- A Debt Collector Contacted You: First 5 MovesThe first five moves people generally make when a debt collector calls or writes — what to say, what not to confirm, and how to get proof in writing.
- What Credit Repair Can and Cannot DoA plain-English map of what credit repair can fix — errors, mixed files, identity theft, outdated items — and what no one can legally remove or guarantee.
Educational information — not advice
This page provides general educational information about credit, debt, and consumer protections. It is not legal advice, financial advice, or credit repair services, and reading it does not create any professional relationship. Laws, procedures, deadlines, and dollar amounts vary by state and change over time.
For advice about your specific situation, consult a licensed attorney or qualified financial professional. See our full disclaimer.