How Long Is a Charged Off Credit Card Bill on a Credit Report?

Scrutinize your credit report for errors.

Scrutinize your credit report for errors.

There is only one good thing about having a charge off on your credit report; It does not stay on it forever. You do want to avoid having this happen in the first place. A charge off remains on your credit report for seven years, during which time it can wreak havoc with your financial life. If you have a charge off on your credit report, you can minimize the damage.

Legitimate Charge Offs

Once you have a legitimate charge off on your credit report, you cannot remove it. It comes off automatically after seven years, plus the date you were first late. A credit card company usually begins the clock when you miss your first payment and waits four to six months of trying to collect the debt before reporting the account as a charge off. The charge off entry remains on your credit report for seven years plus the delinquency period of four to six months.

Mistaken Charge Offs

Credit reports often contain errors. If a charge off is on your report mistakenly, you can get it removed. Get copies of your credit report from Experian, Equifax and TransUnion through AnnualCreditReport.com. This service was set up by the credit reporting agencies. You are entitled to a free credit report once every 12 months. If you see a charge off that is not yours or that remained on your report for more than seven years plus the delinquency period, contact the credit bureau in writing. Explain the error, and ask that it be removed.

Consequences

When you have a charge off on your credit report, it becomes difficult or impossible to receive a loan, rent an apartment or take out a mortgage. Employers often look at credit reports before hiring, so you might cheat yourself from a job. If you have a charge off, you can make it look better by paying it off in full or by settling the account with the collection agency. Once you pay off or settle the account, make sure the creditor reports the new status to the credit reporting agencies. The account will still show the charge-off, but it will show that it was paid or settled.

Time Heals

The more time that goes by with you paying your bills on time, the better. Credit scores are weighted toward last two years of credit history. Although your credit score will not improve right away once you pay or settle a charge off, it will eventually -- as long as you don’t let any more bills become charge offs.

 

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