What is a Credit Card Charge Off & What Happens If You Get One?

Ideally, you’ll never have a charge off on your credit reports. However, if you miss too many payments, you might end up with one. Charge-offs significantly harm your credit score, and dealing with them can be confusing.

Credit card charge-offs occur when a consumer stops making card payments for six months or more. After a credit card account becomes that truant or past due, the card issuer declares that the consumer has a low likelihood of paying off the debt.

What is a Credit Card Charge Off?

If you have a charged-off account, it will show up on your credit reports and lower your credit score. Having charge-offs on your account can make it extremely difficult to get approved for a mortgage, an auto loan, beginner credit cards or credit cards with low-interest rates, and more.

What Happens if a Credit Card is Charged Off?

A charge off will show up on your credit history for up to seven years from the first missed payment. It remains on your account regardless of whether you have paid off the debt or not, unless you make a deal (more on this later).

What Does a Credit Card Charge Off Mean for Your Credit Report?

One or two late or missed payments won’t result in a charge-off. It takes at least six months of delinquent payments (sometimes up to a full year) before creditors mark the debt as a charge-off.

How Does a Charge Off End Up on Your Credit Reports?

Charged off debt can significantly damage your credit rating. When you first started missing payments, your credit score likely already took a substantial hit.

How Bad is a Charge Off on Your Credit Score?

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