How to apply for a payday loan consolidation?

Having a charged-off debt means you have not been paying the full minimum payment on money you borrowed for a significant amount of time. Because of the delinquent payments, your debt is re-categorized as “charged off” on the company’s profit-and-loss statements. That means your creditor has given up hope that you will pay them back.

The company considers the debt a loss, marks it charged off as bad debt as a profit-and-loss write off, and will either sell or transfer your delinquent debt to a collection agency or a debt buyer.

At that point, one debt may now appear twice on your credit report, compounding the confusion. One debt listing will be from the original company you borrowed money from. The second listing is from the debt collector the account was transferred or sold to. Both accounts will show up as active, which can make it frustrating to decipher.

Does Charged Off Mean Pay Off? Do I Still Owe the Debt?

Having your debt charged off does not mean your debt is paid off. Charged off is often used interchangeably with written off, sometimes leading people to believe the creditor has written off their balance and they no longer need to pay their debts. That is not the case. The company is writing off your debt as a loss for its own accounting purposes, but it still has the right to pursue collection of the past-due amount.

You are still legally obligated to pay back the money you borrowed unless you settle (or file for certain types of bankruptcy) or the statute of limitations has been reached.

When Will a Charge-Off Happen?

Creditors will first try to send letters to remind you of a past-due bill. If that fails, they move to a collections process. Re-categorization to “charged off” typically happens after your payment is 180 days past due, though installment loans (something along the lines of a mortgage, for example) can be charged off after 120 days of delinquency.

The six-month mark comes from a generally accepted accounting principle that determines 180 days to be the point after which receiving payment is highly unlikely.

It is important to note that debts can be charged off even if payments have been made, providing that all of the payments were below the account’s monthly minimum. Once the debt is charged off, the delinquency is reported to credit agencies.

How Does a Charge-Off Affect My Credit Report?

A charge-off will be bad news for your credit report. Because a charge-off comes from missing payments, you will have late payments and a charge-off listed on your credit report. Negative information such as those leads to a lower credit score.

In fact, late and delinquent payments have the largest impact on your credit score: up to 35% of your score is determined by your payment history. And a lower credit score can cause everything from higher insurance rates to larger utility deposits to being denied credit.

How Long Does Charged-Off Debt Stay on My Credit Report?

Just like late payments, a charged-off account will remain on your credit report seven years from the date of the last scheduled payment before the account went delinquent. The time period does not start over again if the debt is sold to a collection agency or debt buyer. After the seven years, the charged-off account will automatically be removed from your credit report.

How to Remove a Charge Off from a Credit Report

To remove a charge off from your credit report, you will first have to contact the original creditor to begin negotiations. You will have to convince the creditor that you need the charge off removed, but in exchange, you will provide payment of the debt owed. If you have a larger chunk of money available that you can pay on the debt, then you may have a better chance of success at negotiating.

Before contacting the creditor, you should have a fairly good idea of how much you can realistically pay them on the account. It is also good to note that if the account is in collections, then there is nothing they can do to remove the charge off (although they can remove the collection account). You must speak directly to the original creditor about possibly removing the charge off.

You can also speak to the original creditor about a payment arrangement, however, make sure you do not provide them with any excuses or reasons as to why you weren’t paying before. All they want to know is if you are able to pay the debt you owe. Remain both polite and professional while speaking to the creditor in charge of your charged off account.

What Should I Do if I Have a Charge-Off?

The best thing to do is to consolidate payday loans via PDL Helpers. Once paid, the report will show “paid charged-off.” It won’t remove the charge-off from your credit report, but it will show you are making an effort to resolve the negative account.

If you are unable to pay the debt in full, create a budget to find extra money to pay down the debt quicker. Paying your other debt on time each month is another great way to improve your credit report.

If you want to avoid having any of your accounts charged off, the best thing to do is take preventative measures. Learn and maintain positive financial habits and avoid living outside your means. Look into automating your finances as well to make sure you don’t miss any payments on your cards and put yourself at risk for getting charged off.

Bottom Line

When learning what a charge off is and what you must do to get past this negative mark on your credit report and settle your debt, you should take all the advice we have given you and heed the suggestions while remembering the key points of a charge off:

  • You are still responsible for paying off the debt even if the account has been charged off. This means the full amount owed to the original creditor, and they are able to attempt to collect the debt until the statute of limitations runs out.
  • You might end up making your payments to a third-party collection agency, or debt collector, rather than the original creditor determinant on how much time has passed. If this is the case, however, be sure to practice extreme caution because there are many scams going around in regard to collection agencies.
  • Your credit will definitely suffer through the entire process because of your bad debt. A charged-off account is a big, bold mark on your credit report and it will remain so even after the debt has been paid in full. However, it will look much better if your credit report says that you have paid the account or settled next to the charge off, instead of the charge off sitting as is, unpaid, with no positive notations.

Finally, remember, if you are in debt and feel like you have nowhere to go, there are plenty of debt management programs you can become a part of and they will help educate you on what you need to do to begin rebuilding your credit and digging yourself out of debt.

It is always better to do everything you can to avoid a charged off account appearing on your credit report in the first place. To do this, be sure that you are paying on all your accounts as agreed upon between yourself and the creditors, never allow your payments to become late or overdue, and help recover your credit score by paying off your credit account balances so everything is in good standing.

And don’t forget to check your credit reports from the major credit bureaus at least once a year to make sure everything is accurate and being paid. If you want to check your progress more often, you can get a free credit report summary, updated every 14 days, from

Be sure you are checking credit reports from all three of the major credit bureaus because the information contained in each may differ.

If you’re concerned about your credit, you can check your three credit reports for free once a year. To track your credit more regularly,’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get two free credit scores updated every 14 days.