Balances and payments · Free practice
Settled vs. Paid vs. Charged Off on a Credit Report
One useful skill to practice.
Paid, settled and charged off record different events in different fields. What each means, what the paperwork shows, and what paying does not change.
Read the full guide on CheckDispute Guides (opens a new tab)Check what you know.
3 questions. No sign-up. Your answers stay in this page.
Does paying or settling a collection restart its seven-year reporting period?
Review all questions and explanations
- Does paying or settling a collection restart its seven-year reporting period?
Answer: No — the period runs from the delinquency that preceded the collection or charge-off, plus a 180-day window; paying, settling or a sale does not move it
15 U.S.C. 1681c fixes the start to the commencement of the delinquency preceding the collection activity or charge-off, and the furnisher must report that date within 90 days of furnishing.
- You settled a collection and kept the letter. The report shows a $0 balance but a status of unpaid. What is the discrepancy?
Answer: The status field conflicts with the letter; a collection not updated to show the account current after settlement is the error the CFPB tells readers to watch for
Balance and status are separate fields. The letter proves what was agreed and paid; whether the status is corrected is for the reinvestigation.
- Is settling a debt the same as a charge-off?
Answer: No — a settlement is a partial payment accepted to resolve the debt; "charged to profit and loss" is the statute's phrase for the creditor's accounting action
They record different events and are checked against different documents: the settlement letter versus the reported dates.
Your take-away checklist
- Record the account as printed: name, account number, report page and report date.
- Write down the balance field and the status field separately — they answer different questions.
- Pull the settlement letter or payoff correspondence; record what was agreed, the figure and the date.
- Match the balance field against your payment record: copies of checks or statements, not originals.
- Match the status field against the letter: does it reflect a settled-and-satisfied account?
- Record the report's date of first delinquency and compare it with your records.
- If the balance is not zero or the status was not updated, write one sentence naming the field, the reported value and your document's value.
- Note what the letter proves — what was agreed and paid — and what it does not prove.
Read the source, keep the context.
Original questions and worked examples from CheckDispute, checked against the full guide and primary sources below. Use the explanations to understand what each record does and does not establish.
- consumerfinance.gov: https://www.consumerfinance.gov/ask-cfpb/what-is-a-paid-collection-en-1383/
- consumerfinance.gov: https://www.consumerfinance.gov/ask-cfpb/when-should-i-review-my-credit-report-en-312/
- consumerfinance.gov: https://www.consumerfinance.gov/ask-cfpb/what-is-a-debt-relief-program-and-how-do-i-know-if-i-should-use-one-en-1457/
- consumerfinance.gov: https://www.consumerfinance.gov/ask-cfpb/is-it-possible-to-remove-accurate-negative-information-from-my-credit-report-en-1249/
- law.cornell.edu: https://www.law.cornell.edu/uscode/text/15/1681c
General education, not personalized legal advice. You can dispute errors directly for free. A practice score does not predict a credit or dispute result.