Charge Offs: These are interesting methods creditors use to save on taxes through decreasing their receivables. A charge off is where you haven't paid your bill for a long time and it is apparent that you're not going to pay it at all, or are unwilling to pay it. The company then decides to take this prospective income off the books and write it off as a loss to bad debt. When they do this it creates a new mark on your credit report (thus starting the 7 year time frame all over). These marks stay on your credit for 7 years from last date of activity. This means, that if the charge off is updated for any reason, the time gets reset and it is 7 years from that date.

Solution: If you are having trouble paying your bills, and have old outstanding debts, consider looking into a debt settlement or debt consolidation company.

What Causes Bad Credit:

Inquiries

Late Payments

Charge Offs

Repossession

Foreclosure

Judgements

Bankruptcy