A charge off is a debt that a company has written off as noncollectable. Once they have written the debt off they can take off the loss on their tax returns. That is not where it ends for the person who took out the loan however. For the borrower they will have a charge off or a collection account on their credit report. This is not a good thing for your credit score. One charge off can drop your credit score over 100 points. The only want to take care of it is to pay it off. You will need to speak with the company that is handling the collection of the old debt. That's right, the old company may have written it off, but that doesn't mean that you are out of the woods on paying it back. A collection agency may buy the old debt for pennies on the dollar and try to collect on it. They have a legal claim to collect from you and will not remove the bad mark on your credit until you pay up.
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