When a credit card is "charged off," it means the lender has written the debt off as a loss on their books. It doesn't mean you're off the hook for the debt. Here's what it entails:
What is it? A charge-off is an accounting term a creditor uses when they determine that a debt is unlikely to be repaid. Usually, this happens after several months of non-payment, typically around 180 days.
What it is not: It is not debt forgiveness. You still owe the money. The creditor may still attempt to collect the debt themselves, or they might sell it to a debt collector.
Impact on your credit score: A charge-off has a very negative impact on your credit score. It signals to other lenders that you are a high-risk borrower. The effect will lessen over time, but it can stay on your credit report for up to seven years from the date of the first missed payment that led to the charge-off.
What to do next: Even though it's a charge-off, explore your options:
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