What does "account charged off" mean on a credit report?

I finally got a friend of mine to take a look at her credit report since she doens't pay any of her credit card bills and hasn't for awhile. We got her report and there are some things we aren't sure what they mean.

Here is what one account looks like:
"Account charged off/Past due 150 days. $979 written off. $197 past due as of May 2005."

"This account is scheduled to continue on record until Aug 2011."

"Recent Balance: $979 as of 05/2005"

"Account history: Charge Off as of May 2005
180 days as of May 2005
150 days as of Apr 2005
120 days as of Mar 2005
90 days as of Feb 2005
60 days as of Jan 2005
30 days as of Dec 2004, Jan 2003, Oct 2002"

So what does the whole charged off thing mean? And where it says it will stay on record until August 2011, what does that mean? She thinks it might mean she won't have to pay it after that? Like it will go away from her report?

Any help would be appreciated! Thanks!

"Charged off" means that the creditor was unable to collect and has written off the debt. In other words, they think your friend is a deadbeat and will never pay. The "on record until August 2011" means that this will stay on the credit report until at least 2011. So, any potential creditors who run a credit check will see that your friend doesn't pay her debts.

It means that the credit card company has written off the charges.

It could mean one of two things. First it would take them too much time and money to try and collect so they just gave her negative points on her credit score that will lower it until 2011. Or it could be this and I've faced it. They write it off, turn it over to a collections agency who in turn jacks up the charges, late fees, etc, rings your phone off the hook etc. and it ruins your credit score, reputatoin, and any chances of getting a loan or a new credit card in the future until you pay it off and then you still have the negative points until the 5 or more years are up. GRR. Be careful with your scores and reports people. Check them yearly. And if you need help go see your local CPA for assistance.

the CC compaies assume that she is not going to pay so they have removed the balance from their accounts receivable on their books. However, your friend still legally owes the money & the CC companies can still pursue any legal remedies to which they are entitled.

It means that the credit company has given up trying to collect from her. They wrote it off (they get a tax deduction from the government for doing it) and sold the debt to a collection agency. So now, the debt is owed to the collection agency, and they'll be the ones coming after your friend.

The creditor has "Written off the amount as a bad debt".

This means that the creditor will no longer pursue collection. However, if a "Collection Agency" should discover the bad debt, and sometimes they do, with an agreement by the creditor, they may try to collect the debt. If any collections are obtained by the Collection Agency, they retain 1/2 or more and return the balance to the creditor.

The amount will remain as an unpaid debt on your credit reports until 2011. After that it will be disregarded.

Usually that means that she paid a fraction of the charges and they for gave the rest. Or sometimes if the amount is small enough they will charge it off without collecting anything because it would cost them more money to pursue it than to just forgive it. It still is a bad thing to have in your credit report.

I assume where it says in will remain on record til 2011, that is how long it will show up in a credit check, but I'm not sure of that one.

"When a creditor puts a "charge off" on your credit report, it means the creditor no longer believes you will pay the bill and has written the debt off of its books. Often, they then sell your debt to a collection agency that pays pennies on the dollar for the right to try and collect your debt.

The collection agency will then come after you to pay up. They will hound you until you agree to pay what they say you owe. While it is legal for them to pursue you, they have to live within the rules of the Fair Debt Collection Act. For more information on the Fair Debt Collection Act, go to the Federal Trade Commission's website, ftc.gov, or log onto http://www.ftc.gov/cp/conline/pubs/credit/fdc.htm for an easy-to-understand Q&A about legal debt collection practices."

Credit Score Exactly What is it and How do You Determine It
By: John R Blakefield

Look on this website- you'll find ALOT useful information.
Good Luck!!!!

It basically means that she did not pay on it and it was charged off by the company but that you still do owe it. Bad mark on her credit report. These charge offs stay on her report for up to 10 years I believe or it may be 7. Most likely, these credit card companies have already turned these accounts over to a collection agency which will also go on the credit report.

That means the original company she owed the debt to thinks she's not going to pay it. They sold the debt to a collection agency who will now try to get it from her.

Aug. 2011 is seven years from the date of last activity on the account. That means that black mark will remain on her account until then (significantly lowering her credit score) If your friend ever wants to have good credit, tell her to contact the collection agency who has her debt, work out a payment arraingment with them or just pay them off if she has the money, and to get an agreement (in writing) that they will take the collection off her credit record.

If she doesn't, if she ever wants to get a credit card, a car loan, a mortgage, or even good insurance rates, it's not going to happen and she's to end up paying through the nose for all that.

Not sure read some credit tips and more on this site

When you read the question you just ask, the answer is obvious how can any one give you a better answer.

IT means your credit score is heading south fast...your going to have trouble getting credit any time soon. It will be clear to any one you need to borrow from that you don't have a good track record of repayment. If you do get a loan your interest will be sky high even if you have collateral.

It also means they may have passed it off to a collections agency. Which means your life is about to suck. These people buy bad debt from the bank and then go after the dead beat (that would be you) and they don't let up till they get some money. They will call you morning noon and night. At work (even though they are not supposed to do that), at home, on your cell, day and night. Then they start turning up on your door step. They don't let up. It can get very ugly and unpleasant. That's what they do. Make it easier for you to pay than to continue to avoid them. So they will do what ever it takes to make your life suck till you pay up.

are you really so stupid as to think you can go out borrow money and then not pay it back and no one is going to notice and there will be no consequences? If thats the way you think it goes, great, loan me some of YOUR money and I'll not pay you back.

The 30 days as of of Dec 2004, Jan 2003, Oct 2002 means you were 30 days late once in dec 2004 and again in jan 2003 and again in october 2002.

And as of May you got so far behind that they decided your not going to pay it. They charge it off to get it off the books but the debt does not go away. Charging off is the first step to getting it into collections.

Next will come a lot of phone calls and at some point a trip to court and a judgment against you for the money. Once the judgment is in place the way is cleared for them to garnish your wages. By the way non of this is going to help your credit score. Hope you don't need money any time in the next decade.

I worked in collections for a cell phone company. I have heard every story and excuse. I have had to deal with people just like you who have no clue just how bad its going to get. I have dropped peoples credit rating through the floor till no one would loan them money even when they were in deep trouble and needed cash to get out of a crisis or buy a home. Many of them had trouble finding a place to live. Land lords are not keen on renting to folks who have bad credit because they know they may be the ones not collecting rent. Most land lords need that rent money to pay the bank the mortgage on the home your living in. If you don't pay, they still have to pay the bank and they will toss you out fast and get some one else in who WILL pay. And yes I was continuing to try to collect from them when they were down to sleeping on park benches. Yes I have chased them that far. I have actually chased a man to a park bench in california for an unpaid cell phone bill. No one would employ him becasuse a garnishment against his wages is a hassel for employers and no one would rent to him. No one would give him a mortgage so he moved onto a park bench and I still went after him. He eventually paid. Now that the debt is collected, he is still on a park bench years later. His history is still haunting him. I was the nicer of the collections agents. I was only part time as I was just doing it as a second job so I could pay off a few of my own bills.

You have no idea how bad your life is about to get. If you ever have an emergency and need a loan, I guess you better get used to not being able to get help when you need it.

So for less than a thousand dollars, your going to screw up the next decade of your life. Thats not smart.

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