According to Experian, when a creditor reports an account as “charged off” that entry will remain on the consumer’s account for seven years, and will have a negative impact on the consumer’s FICO credit score. To that end, several courts have recognized that a charge off is “one of the most adverse factors that can be listed on a credit report.” Artemov v TransUnion, LLC, 20-CV-1892 (BMC), 2020 WL 5211068, at *4 (EDNY 2020) (citing Hanks v. Talbots Classics Nat. Bank, No. C 12-2612 SI, 2012 WL 3236323, at *1 n.2 (N.D. Cal. Aug. 6, 2012); F.T.C. v. TRW Inc., 784 F. Supp. 361, 362 (N.D. Tex. 1991) (defining “Serious Derogatory Information” as, among others, a bankruptcy, charge off, foreclosure proceedings, and repossession)).

But there is confusion from both consumers and lawyers alike as to what a “charge off” is, and when a creditor can report an account as “charged off.”

Read the full article on attorney Timothy Hiller’s FCRA Today Substack, a newsletter devoted to developments pertaining to the FCRA, and the consumer reporting industry more broadly. For lawyers and non-lawyers.

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