Why Your Credit Report Shows “CO” Every Month After a Charge-Off (And Why That Usually Isn’t an Error)

Consumers are often surprised—and understandably concerned—when they review their credit report and see “CO” (charge-off) appearing month after month in the payment history of an account. It can look like the creditor is charging off the account repeatedly. This is one of the most common sources of confusion we hear from consumers reviewing their credit reports.

In most situations, however, that type of reporting is not inaccurate under the Fair Credit Reporting Act (FCRA).

This article explains what is actually happening.

What a Charge-Off Really Means

A charge-off occurs when a creditor moves a debt from the “profit” column to the “loss” column on its balance sheet. In other words, the lender determines—primarily for accounting purposes—that the debt is unlikely to be collected.

Federal regulators have described an account being “charged to profit and loss” as a creditor writing off the account internally. Certain creditors—particularly banks and other depository institutions—are subject to regulatory rules requiring them to charge off seriously delinquent debts after a certain period.

At the same time, creditors often have financial incentives to charge off bad debt, including potential tax benefits.

Importantly, a charge-off does not eliminate the debt. The balance is still owed unless it is later:

• paid,

• settled,

• discharged in bankruptcy, or

• otherwise resolved.

  
  

Why “CO” Appears Month After Month

A charge-off is a single accounting event—it only happens once. But credit reports track the status of an account each month.

After an account has been charged off, the account remains in charged-off status until something changes (e.g., payment, settlement). Because the status remains the same, credit reporting systems typically repeat the same notation in the monthly payment history.

In practical terms, the report is saying:

“This account was charged off, and it remains in charged-off status.”

It does not mean the creditor is charging off the account again each month.

How Courts View Monthly “Charge-Off” Reporting

A charge-off notation is considered highly negative credit reporting. Because of that, consumers sometimes argue that repeated “CO” entries create the impression of multiple charge-offs.

However, many courts have held that reporting the account as charged off in successive months is not inaccurate or misleading under the FCRA. The repeated notation simply reflects that the account’s status has not changed.

Credit reporting agencies commonly continue to display this status until the account is updated—for example, if it is paid, settled, or transferred.

Does Seeing “CO” Every Month Hurt Your Credit Score More?

Consumers sometimes worry that multiple charge-off notations will harm their credit scores more than a single charge-off.

According to VantageScore, repeated charge-off notations generally do not further damage a credit score beyond the initial charge-off status. Some lawsuits have alleged that certain FICO scoring models treat repeated charge-offs more harshly. Courts considering those arguments have generally rejected the claim that this makes the reporting inaccurate under the FCRA.

In other words, even if a scoring model weighs the information differently, that does not necessarily mean the credit report itself is wrong.

When Charge-Off Reporting Can Become Inaccurate

Although the monthly “CO” notation itself is usually permissible, credit reporting can still violate the FCRA if it becomes factually incorrect or materially misleading.

Examples may include:

• Reporting a balance after the debt was paid or settled

• Listing an incorrect date of first delinquency

• Reporting a charge-off after the debt was discharged in bankruptcy

• Reporting information that misrepresents the account’s actual history

These types of errors may raise accuracy issues under the FCRA.

The Bottom Line

Seeing “CO” repeated across several months on a credit report can be alarming, but it usually just means the account remains in charged-off status. Because the status has not changed, credit reporting systems often repeat the same notation each month.

By itself, that reporting is generally not inaccurate under the FCRA if the account remains unpaid and the information reported is otherwise correct. However, if other aspects of the reporting are wrong or misleading, it may still create legal issues under federal consumer protection laws.

If you have questions, contact us today for a free case review.