How Long Do Charged-Off Accounts Stay on Your Credit Report?

Credit reports record an individual’s borrowing and repayment history. Lenders, landlords, and some employers use these reports to assess financial reliability. A “charged-off account” is a particularly impactful negative mark on a credit report.

Defining a Charged-Off Account

A charged-off account means a creditor has written off a debt as a loss. This occurs after a prolonged period of non-payment, often when an account is 120 to 180 days past due. The lender removes the debt from active accounts, recognizing it as uncollectible.

A charge-off does not mean the debt is forgiven or erased. The consumer remains legally obligated to repay the debt, even after it has been charged off. The creditor adjusts its records to reflect the debt’s uncollectible nature, which can then be sold to a debt buyer or transferred to a collection agency.

Credit Reporting Timeframes

A charged-off account significantly affects a credit report. These negative entries can remain on a credit report for up to seven years, as mandated by the Fair Credit Reporting Act (FCRA).

The seven-year period is calculated from the date of the first delinquency that led to the charge-off, not from the date the account was officially charged off by the creditor. For instance, if a payment was first missed on January 1, 2020, the seven-year reporting period would begin from that date, even if the charge-off occurred several months later. This consistent timeframe applies across the three major credit bureaus: Experian, Equifax, and TransUnion.

Collection Efforts and Your Report

Even after an account is charged off, the debt remains a legal obligation, and collection efforts often continue. The original creditor may sell the charged-off debt to a third-party collection agency for a percentage of its value. This new entity then assumes the right to pursue payment from the consumer.

When a charged-off debt is sold to a collector, a new collection account may appear on the credit report, potentially duplicating the original charge-off. Both entries can negatively affect credit scores. Paying the debt will update the status to “paid charge-off” or “paid collection,” but the entry remains on the report for the full seven-year period from the original delinquency date.

Accuracy and Disputing Information

Regularly checking credit reports from all three major bureaus ensures accuracy. Consumers are entitled to a free annual copy from each bureau via AnnualCreditReport.com. Reviewing these reports helps identify inaccuracies related to charged-off accounts or other debt.

If an inaccuracy is found, such as an incorrect date of first delinquency, an incorrect amount, or an account that does not belong to the consumer, it can be disputed. Disputes involve contacting both the credit reporting company (Experian, Equifax, or TransUnion) and the information provider (the creditor or collection agency). A written dispute should clearly explain the error and include supporting documentation. The credit bureaus are legally required to investigate disputes within 30 days and correct any verified inaccuracies.