Net Charge-Off (NCO)

A net charge-off (NCO) is the dollar amount representing the difference between gross charge-offs and any subsequent recoveries of delinquent debt. Net charge-offs refer to the debt owed to a company that is unlikely to be recovered by that company. This bad debt often written off and classified as gross charge-offs. If, at a later date, some money is recovered on the debt, the amount is subtracted from the gross charge-offs to compute the net charge-off value.