What does "Charged off as bad credit" mean?


Q: What does it mean when "Charged off as bad credit" is included on the credit report under a tradeline?

A: It means the applicant stopped or did not start providing payments to the creditor listed.

Solution: Seeing "Charged off as bad credit" is never a good sign. It means that the creditor has not received the minimum payments from the person for some time/at all. The company considers the debt a loss and will either sell or transfer the delinquent debt to a collection agency or debt buyer.

At that point, one debt may now appear twice on the credit report. One debt listing will be from the original company money was borrowed from. The second listing is from the debt collector.

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