I found an account on my credit report that was reported as charged off. What implications does this have?

Question

I found an account on my credit report that was reported as charged off. What implications does this have?

Answer 1

Well if the account is now charged off the implications have been there a while and the negative account has been adversely affecting your credit since the day it went into default.

If it's an old account and/or nearly the 7 year statute of limitations, just leave it alone and let it fall off your report. If it's still relatively new, you need to get in touch with the credit and make arrangements to pay. It may be showing as a charge off today and a collection item tomorrow.

Answer 2

A charged off account is a derogatory item and adversely affects your score.  It will remain on your credit file for 7-1/2 years from the date of first deficiency.  This reporting period is per the FCRA and nothing restarts the clock.

It is likely that a collection agency will be assigned or purchase the debt and begin hounding you.  They can even sue.

If the item is not yours, dispute it with the credit bureaus.  If it is yours, contact the creditor and negotiate settlement.  Get any agreement in writing and do not give the collector direct access to your bank account.