Daniel RosenCredit Repair Business Mentor | Insights from 250+ Podcasts

Charge Off Removed = Financial Freedom

5 Dec 2024 · 1 min

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Daniel Rosen explains what a charge off is and how it damages your credit. A charge off stays on your report for seven years and can hit you twice: the original missed payment plus a collection entry. One charge off can drop your credit score by 50 to 150 points.

Questions this video answers

Seven years from the date of the first missed or late payment.

The new collector reports the account as a new collection, creating both the original negative payment history and a separate collection account (a "double hit").

Approximately 50 to 150 points.

Chapters

One of the most challenging things you can face is a charge off. Charge offs are extremely damaging to your credit report. They live on your credit reports for seven years from the date of the first missed or late payment, but also because the new debt collector, the one who just purchased it, now reports the account as a new collection. So your credit report shows a bad payment history with the original creditor, and it also shows a collection account. I call that a double hit. Their impact varies wildly depending on the circumstances, but just one charge off can drop your score anywhere from 50 to 150 points.