At Kikoff, our mission is to replace predatory financial services with radically affordable, effective technology solutions that make financial security possible for everyone. We understand that unexpected events can make it difficult to stay on top of every payment. What’s important is knowing how “late payment” statuses work and when they can escalate. If payments remain unpaid for 6 months, your account may eventually reach a “Charge-Off” status, where your revolving Credit Account is closed due to non-payment.
What is a Charge-Off?
A charge-off happens after a customer stops making payments for 6 months consecutively. Unlike a streaming or shopping subscription that might simply stop if you don’t pay, your Kikoff account does not stop when you miss a payment. The Kikoff account is similar to a revolving account (credit card). That means the balance you owe each month continues to build over time until it’s paid, or until you cancel your account.
For example, if your Kikoff account is $20 per month and you go three months without paying, your balance would add up to:
- 1 month missed = $20 due
- 2 months missed = $40 due
- 3 months missed = $60 due
During this time, your delinquency will be reported to the credit bureaus, which can negatively affect your credit score.
There are multiple tiers of delinquency (e.g. 30 days, 60 days, 90 days). Higher tiers have a greater negative impact on your credit. If payments are not made for six months consecutively, the account may be closed and reported as a charge-off.
What can I do?
- Pay Off Balance: Paying off your balance restores your Kikoff account to good standing and allows you to continue your credit-building journey. While this won’t remove any past delinquency status that’s already been reported to the credit bureaus, it stops further negative reporting and helps you rebuild positive history moving forward.
- Contact Us ASAP: If you cannot pay off the amount you owe, please contact Kikoff as soon as possible. We may be able to walk you through options to keep your account in good standing.
- Account Cancellation: Cancelling your account fully waives any amount owed, but any existing negative credit reporting will remain on your credit report.
How a Charge-Off Affects My Credit
A charge-off can have a serious impact on your credit report. It signals to lenders that the account was not paid as agreed, which may lower your credit score and make it harder to qualify for new credit in the future. Charge offs may stay on your credit report for up to 7 years.
How Kikoff Calculates a Charge-Off
If your account reaches charge-off status, the balance reported is the outstanding balance remaining on your 1-year term.
Example:
- On a $20/month plan, the total yearly obligation is $240 (12 x $20/month).
- If you pay for 4 months and then stop paying, you will eventually be charged off for $160 (8 months that you did not pay x $20/month).
At Kikoff, we want to see you succeed. If you ever feel unsure about making a payment, please reach out - we’re here to help you stay on track and protect your financial journey.