What Is a Charge-Off and How Does It Affect Your Credit?
April 11, 2026 | 4 min read
Written By:
Credit Saint
Credit Saint
Staff Writer
With years of experience and a passion for helping clients achieve their financial goals, our team is committed to guiding you on your journey to credit recovery and financial success.
Reviewed By:
Ashley Davison
Ashley Davison
Editor
Ashley is currently the Chief Compliance Officer for Credit Saint, previously the Chief Operating Officer. Ashley got into the Financial world by working as a Logistics Coordinator at Ernst & Young. Coming from a previous career in education, she is eager to teach the world every...
A charge-off is when a creditor writes off your unpaid debt as a loss, usually after about 180 days of missed payments. You still owe the money, and the debt may be sold to a collection agency.
A charge-off is a serious negative item that can stay on your credit report for up to seven years.
A charge-off means a creditor considers a debt uncollectible and writes it off.
A charge-off is a serious negative item and can have a substantial impact on your credit profile.
It can remain on your credit report for up to seven years from the date of first delinquency.
You still owe the debt, and it may be sold to a collection agency.
What Exactly Is a Charge-Off?
According to Experian, a charge-off happens when a creditor, like a bank or credit card company, decides you are unlikely to pay a debt.
This usually follows a long stretch of missed payments, typically 180 days. The original creditor then writes off the debt as a loss and moves it out of its active accounts.
The original creditor may stop pursuing the debt directly, but it often sells the debt to a third-party debt collector for a fraction of its value. That collector can then try to recover the full amount from you.
Even after a charge-off, you still legally owe the debt. Our guide to how debt collection works explains what to expect next.
A charge-off can lower your score in more than one way:
Missed payments first: The late payments that lead up to a charge-off are reported along the way, and payment history is the largest factor in most scoring models.
The charge-off itself: It is reported as a serious negative item, which lenders see when they review your report.
A possible collection account: If the debt is sold, a separate collection entry may also appear.
The impact tends to lessen as the charge-off gets older and you add positive history, such as on-time payments on other accounts.
How Long Does a Charge-Off Stay on Your Report?
A charge-off can stay on your credit report for up to seven years from the date the account first became delinquent, whether or not you pay it. Paying or settling it doesn’t restart that clock.
A charge-off is the original creditor’s entry; a collection is a separate entry from a collector. The charge-off happens when the original creditor writes off the debt. A collection account appears if the debt is then sold or assigned to a third-party collection agency, which tries to collect from you. Both are negative marks. Learn more about how long collections stay on your credit report.
Yes, if it may be inaccurate, incomplete or unverifiable. For example, the balance, dates or account status may be wrong, or the account may not be yours. Bureaus generally have 30 days to investigate a dispute, and information that can’t be verified must be corrected or deleted. An accurate charge-off can stay on your report for the full reporting period. See our guide on how to dispute items on your credit report.
Up to seven years from the date of first delinquency. That’s true whether or not you pay the charge-off.
It can help how lenders view you, but it won’t remove the entry. Once paid, the status changes from “unpaid” to “paid” or “settled,” which lenders generally view more favorably. It also shows you’ve handled the obligation. For more details, see the Consumer Financial Protection Bureau.
Bottom Line on Charge-Offs and Your Credit
A charge-off means a creditor wrote off your debt as a loss, but you still owe it, and it can stay on your report for up to seven years whether or not you pay.
Dispute it if the balance, dates or status look wrong, decide how to handle the debt (see negotiating with creditors), and keep building on-time history.
Reviewed By:
Ashley Davison
Editor
Ashley is currently the Chief Compliance Officer for Credit Saint, previously the Chief Operating Officer. Ashley got into the Financial world by working as a Logistics Coordinator at Ernst & Young. Coming from a previous career in education, she is eager to teach the world everything she knows and learn everything that she doesn’t! Ashley is a FICO® certified professional, a Board Certified Credit Consultant, a Certified Credit Score Consultant with the Credit Consultants Association of America, UDAAP certified, and holds a Fair Credit Reporting Act (FCRA) Compliance Certificate.
