Credit Scores & Credit Monitoring What To Do About Bad Credit How To Avoid a Charge-Off By LaToya Irby LaToya Irby Facebook Twitter LaToya Irby is a credit expert who has been covering credit and debt management for The Balance for more than a dozen years. She's been quoted in USA Today, The Chicago Tribune, and the Associated Press, and her work has been cited in several books. learn about our editorial policies Updated on April 15, 2022 Reviewed by Ebony J. Howard Reviewed by Ebony J. Howard Ebony Howard is a certified public accountant and a QuickBooks ProAdvisor tax expert. She has been in the accounting, audit, and tax profession for more than 13 years, working with individuals and a variety of companies in the health care, banking, and accounting industries. learn about our financial review board Fact checked by David Rubin Photo: Rob Daly / Creative RF / GettyImages A charge-off is one of the worst entries that can appear on your credit report. Creditors typically charge off seriously delinquent accounts that have not been paid on time for six months straight. After a Charge-Off Once your account is charged-off, you will no longer be able to make purchases with the account. However, you still owe the charged-off balance. The creditor will report a charged-off account status to the credit bureaus. This status will remain on your credit report for seven years from the date you first went delinquent. In the future, when creditors and lenders pull your credit report, they'll see you once were late enough to have a charge-off. Your credit score will drop after a charge-off. Payment history weighs heavily in the calculation of your credit score. An unpaid charge-off will affect your credit score more when it first happens. As time passes, your credit score can improve if no additional negative entries are placed in your credit report. How To Avoid a Charge-Off Avoiding a charged-off account is easier than you might think. All you have to do is make the minimum payment on your accounts each month. Each month you're late on a payment, you're one step closer to having your account charged-off. Get caught up on delinquent accounts, especially if they are four or five months late (120-150 days). Expect to pay more to bring your account current because of the missed payments and late fees. It's better to pay the money now than to deal with the results of a charged-off account for years to come. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Experian. “How Long Do Charge-Offs Stay on Your Credit Report?”