LTerminal Negative Conditions
Payment Rating L: Charge-Off
Payment Rating L means "Charge-Off". The account was charged off. The rating preserves that outcome on records whose Account Status is describing the account's end state rather than a payment level. It is reported in Payment Rating (Field 17B) of the Base Segment, 1 character at position 111.
Specification
| Code | L |
|---|---|
| Meaning | Charge-Off |
| Field | Payment Rating (Field 17B) |
| Record | Base Segment |
| Length / position | 1 char · 111–111 |
| Category | Terminal Negative Conditions |
| CRRG reference | CRRG Base Segment field definition, Payment Rating |
What Payment Rating L means
- A charge-off is an accounting action: the creditor has written the balance off as a loss. It is not forgiveness, and the debt generally remains legally collectible.
- Rating L is the rating that carries the charge-off outcome, and it is the clearest illustration of why this field exists at all. Once the Account Status says "charged off", the status can no longer say how far behind the consumer was, so the rating carries the terminal condition instead.
- It does not mean the balance is zero. A charged-off account frequently continues to report a Current Balance that the furnisher is still trying to collect, and payments received after charge-off reduce it.
- It does not mean collection. Rating G is the collection condition, and a charged-off account may or may not have been placed with an agency.
- It does not reset the Date of First Delinquency. The FCRA seven-year period runs from the original delinquency that led to the charge-off, and re-anchoring it to the charge-off date extends the tradeline's life improperly.
When to report L
- 1A card issuer charges off a revolving account at 180 days past due and reports the charge-off with the amount written off.
- 2A credit union charges off the deficiency balance remaining after a repossessed vehicle is sold at auction.
- 3An installment lender charges off a defaulted personal loan under its internal policy and continues collection efforts on the balance.
- 4A furnisher reports post-charge-off payments that reduce the Current Balance while the charge-off outcome stays on the record.
Reporting rules
- Populate the Original Charge-off Amount in the same record. A charge-off with no amount written off is an incomplete story and a specific validation failure.
- Keep the Date of First Delinquency anchored to the delinquency that led to the charge-off. This single date determines when the tradeline ages off the consumer's report.
- Keep reporting the account after charge-off while you continue to collect, and reduce the Current Balance as payments arrive. Do not leave a charged-off balance frozen after the consumer has paid it down.
- If you sell the charged-off account, reflect the sale on your record with the appropriate transfer and sale status and a K2 segment naming the purchaser, and stop reporting a collectible balance.
Codes and fields that must agree
A file can be structurally valid and still be wrong. These are the cross-field conditions Payment Rating L has to satisfy.
- Relates to Account Status 97 (charged off). The status and the rating should be consistent in the same record.
- Requires the Original Charge-off Amount to be populated, and it should equal the balance written off at the time of charge-off rather than the current balance.
- Requires a Date of First Delinquency anchored to the original delinquency, not to the charge-off date.
- Position 1 of the Payment History Profile must agree with the current rating.
- If the account is subsequently sold, the seller's record moves to the transfer and sale statuses 61 through 65, which require Current Balance and Amount Past Due of zero, with a K2 segment identifying the purchaser.
Common errors involving L
B003B019B026
Status and Payment Rating Mismatch
The account status does not match the payment rating history
Original Charge-off Amount Missing on Charge-off
Account Status is 97 (charge-off) but no Original Charge-off Amount is reported
Date of First Delinquency Missing on Delinquent Account
A delinquent or charged-off account has no Date of First Delinquency
Vocabulary
Keep browsing
- All 9 payment ratings — the full set with categories and cross-field rules.
- Metro 2 codes cheat sheet — every CRRG code set on one page.
- Payment Rating field reference — position, length, and validation rules.
- Metro 2 format reference
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