Charge-off
Updated
A charge-off is an accounting classification. After a period of serious delinquency, a creditor moves the receivable from its performing books to a loss. The notation can be furnished to a consumer reporting agency, where it is a status on the tradeline, not a court judgment and not proof the balance is zero.
The debt is still owed unless it is paid, settled, discharged in bankruptcy, or otherwise extinguished. A collector, or a debt buyer, may still ask for payment. Whether they can still sue depends on the state’s statute of limitations, which is a different clock from the federal reporting period. Most charge-offs may be reported for seven years from the date of the delinquency that immediately preceded the charge-off, under 15 U.S.C. §1681c. Paying the charge-off does not, by itself, move that start date, and it does not guarantee a score change.
If the status or the balance is wrong, the accuracy process is a dispute under FCRA §611. If the status is right, a dispute that simply dislikes the word “charge-off” does not require the bureau to delete it.