If you see a “charge off” report on your credit history, your original creditor finally took your debt off of their books. What does this mean for your credit? Since the creditor reported the loss, your score will feel negative effects for the next seven years.
Understand a “charge off”
You had a credit card account that went unpaid. The creditor tried to collect but the debt went into default. What was once an asset to a creditor has now become a liability. Eventually, that creditor will ‘charge it off’ their books as a loss. Your credit report will reflect this action. It will scar yourcredit history for seven years as of the date the debt first went into default. Even if you paid your debt to a collectionsagency, the original debt remains a loss to the lender.
The first two years of the seven will carry the heaviest negative effect on your credit report. Other lenders who docredit checks will see that report and most probably prefer not to risk taking you on as a