R9 chargeoff account and Credit Rating - The Bills.com Blog

Is there a way to keep my account from going r9 while negotiating a settlement? I'm currently in a consolidation program where I stop paying the creditors directly and save the money that I would be paying into a savings account. I do not have enough saved to make a good settlement offer, but would doing something like sending $20 a month keep them from taking it that far?

It sounds like you are enrolled into a debt settlement program. In this type of debt resolution setup, you don't pay anything to your creditors (and your accounts go delinquent and almost certainly will charge-off or pass the R9 status) while you save up for a reduced balance settlement. If you are making a monthly payment and remaining current, then you will never be able to qualify for a settlement... but in that case if you can afford to make your payments and if by chance you do not have a financial hardship then a settlement program isn't really right for you anyway. If you just make a token amount that is less than your required minimum payment, then the account is still considered delinquent and will likely chargeoff. Essentially, in a debt settlement program the benefit is the low payment and the savings; but the cost is the credit impact and the collection issues. Good luck.

My son has a credit card account that was in arrears. He made payment arrangements with the credit card company and has been making those payments. Yesterday he received a call from the credit card company stating that the payments he was making were insufficient and that his account had been put, or would be put, into R9 delinquency. They said they were sorry that the person who set up the payment arrangement was incorrect but there was nothing he could do, period. Do you have any suggestions? Thank you.

I hope your son had written confirmation of the said payment arrangement, if not, then he should try and talk to them and let them know that given his financial condition, he can only afford so much. As for the delinquency, unless he pays the arrears, it is going to hurt his credit.

I paid off a charged off account that had a R9 status. Will the R9 status change or do I need to contact the company?

An R9 status essentially means that a revolving account went to chargeoff. R1, R2, R3, R4, etc. all of the way to R9. It does not mean that it necessarily is CURRENTLY in chargeoff. What you need to do is to send the pay-off notice to the 3 bureaus requesting them to remove the chargeoff status, but unfortunately it might not come off since the listing of an R9 was accurate and you might have to wait the 7 years until the paid off account falls off of your credit report.

I have an R9 rating on my credit report with a $0 balance, how long does it take it to be removed from the report

It will take upto 7 years from the date of the delinquency, for that account to fall off of your credit report. This is according to the Fair Credit Reporting act, you can check it here (on page 23): http://www.ftc.gov/os/statutes/031224fcra.pdf

I've been threatened with an R9. Even though I've repeatdly told them I intend to pay the account ASAP. How do I best handle this?

An account getting charged off happens automatically after 180 days of non payments. This is not something that the creditors can threaten to do so at their will. Keep making some payment at least, that way the account will not get pushed to charge off status.

Can a person with beacon score is 483 and all in R9 file for bankruptcy? please advice

Yes. There is no contraint on filing bankruptcy based on your credit score. Given your R9 and your low score, bankruptcy will not cause a large decline in your score, so it should certainly be considered as an option if you are struggling with debts. I hope this helps.

I am considering settling with a credit card company. I owe $7300 and I am offering them a settlement of $5000. They said they would settle but would file an R9 with the credit bureaus. My question is how will an R9 effect my credit scores? I pay my bills on time. I am just trying to get my debt down. But would like to know what this will do to the credit scores I currently have, how much would it lower the scores if this is the only ding I have. Please advise.

An "R9" status (frequently called a charge-off) is a credit report status that represents a trade-line that is severely delinquent (more than 6 months behind) and is a 'ding' on your credit report. If it is inaccurate and you pay the account off, the trade-line will simply say closed or paid in full, but the history of delinquency will remain. You should evaluate the pros and cons of accepting this offer, as it will have an adverse impact on your profile, and other creditors will view it as an account that was charged off and you were unable to make payments on this account.

I had some troubles about 5 years ago with capital 1 . I payed off my ballance with a check from another CC company to get a lower rate. At some point, i do not no witch the account didnot get paid off. They miss applied the funds to another account. I was not aware of this. I kept getting mail from them but never bothered to read it! After about 6 months they called and told me i still owed it all it took 30 to 60 days for them to refund the money to me and for me to pay the card off. By then it was in collections and now i have a R9 on my credit score and am having sever trouble getting a house loan. I wrote capital 1 a letter and they just responded that they will up date my credit rating with them to all 3 companies with the R9 on it. It was only on one before! Now im worse off!! what do i do? please help!

There is no easy way out of this. you need to pull each of your credit reports and statements for the Capital one account to confirm all the payment dates and so forth. If you believe there has been an error, you can dispute the same with each of the 3 credit bureaus. You can find a free guide to dispute credit report errors here: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre21.shtm

i filed a chapter 7 bankruptcy that was dismissed i had a victoria's secret credit card account that was charged off. I had a zero balance never paid them late they told me they charged the account off and does not matter whether i had a zero balance or not please advise, how can you charge off an account with a zero balance???

Technically, a charge-off is an accounting and credit term that means that a lender has not recevied payment in 180+days. If it is a zero balance, then i'm not sure what was charged-off? I would recommend sending the collector a validation notice and then sendign a letter to the three bureaus asking for the derogatory mark to be removed.

I have been out of work and used all my money in my savings account, I should have closed the account but continued to just pay a $5 service charge each month. Three months in a row I was unable to pay it and figured it was just adding up but since I checked the account I found that the third month did a "Charge off account - credit" instead of a service charge. From what I have read here and other sites I understand I can still pay the debt to my bank or the credit agency that's handling the debt but it will still show as a paid charge off. It's only $9.99, does balance have anything to do with how badly this will affect my credit?

It probably will help your credit rating if you pay this off. It is such a small dollar amount, that I would recommend paying it off and requesting for the bank to re-age the account and remove or update the chargeoff listing. Good luck.

Due to some business challenges last year, in February of this year I got about 6 months behind on most all payments. I managed to avoid bankruptcy by restructuring my mortgage and convincing all but one of the credit card companies to switch to zero interest while allowing me to pay down the remaining balances over 5 years. I have been trying to get some resolution out of Capital One for nearly a year now. Their solution all along has been for me to pay a percentage (approx 20% 30%, depends on who is calling that day), then they will write off a portion of the amount owed and then I can pay the remaining balance over 12 months. (Funny, if I could do that, I wouldn't have been behind to begin with). I didn't understand the whole concept of the R9, but now, sadly, I do. I am finally at the point now where I could come up with some sort of agreement that works within their limited structure and pay off the amount over 12 to 24 months (Although they haven't as yet agreed to 24 months). Here is the question. With the R9 on the credit report already and who knows how low my credit score is, should I go ahead and let them write off $3,500 and then pay down a smaller balance over 12 months or just go ahead and pay the full amount due over twelve months? At this point, will the $3,500 write off on my credit report really make all that much difference?

If you already have an R9, why should you even make any payments on that debt? Didn't they already charge it off? As I understand it, this means that they wrote it off as noncollectable. The damage has been done to your credit, so why bother paying it off, if they aren't going to take off the R9.

If they have already reported the debt as an R9 charge off, then there is no point in paying the full amount, you might as well take a the lower settlement amount.

Charge off is just an accounting term used to re-classify the debt. You still owe the debt and will continue to show on your credit report. In the future the debt might be sold to a 3rd party collection agency who will also try to collect on the debt or even file a legal suit against you.

I have an old R9 showing up on my credit score and have agreed to pay off a settlement over a 6 month time period. ($1,400) What are my chances of getting a mortgage with my parter who has a good credit score - and how long should I wait before I apply?

You should definitely wait until the R9 account shows a zero balance, and even a few months after that before you start looking for a mortgage.

I have and R9 on my credit score from an overdraft chequing account that was forgottan and written off. I payed it off and was told by the collections companie that my credit score would not be affected. Is there any possible way to have an R9 removed? If not how can I get a loan or a credit card with this on my credit file?

The R9 will stay on your credit report for 7-10 years from the date of the last payment, I don't think you can get it removed, unless it was an erroneous entry. If you recently paid it off, then you should wait for at least 6 months before you apply for new lines of credit.

Ok i've been clearing off my credit report these last few mths for a home loan and i have a capital one debit from 7 yrs ago this sept we are looking for a home loan FHA and my score is below 550 right now my debit to capit is 1553 dollars if i make a settlement will it raise my score to 580 or should i let it roll off? it says charged off atm

A charge off does not mean that you do not owe the debt, it is just a type of account classification. It will actually help your credit to get this account paid or settled.

I am asking how much it would raise my score by how many points?

We cannot really predict by how many points. There are too many other variables involved.

If you already have an R9 status on a revolving account and still owe a balance, can a bank negotiate the removal of the R9 from your credit report if you pay a settlement? In other words, does the bank have the power to remove the status, or are they required by law or contract to leave it there, even if you pay off your account?

Unless the R9 was reported in error, the bank is obligated to report accurately. Still, it is MUCH better for your credit to have an account with a chargeoff or R9 status to be resolved as settled than to leave it open. Good luck SK.

hi i got a call from a collection agency and i had made arrangements with the credit card company before it went to collections and i mailed a payment to the credit card company they put it towards my card and the next day sent it to collections. My account was not even 3 months past due and the collections company are telling me it is a r9 are they right because i thought it had to be 6 months past due to be a r9. My credit is excellent how is this going to affect my credit score? Everything elsed is up to date other than this one should i pay it off or leave it? Is the damage already done?

You are right about a charge off happening after 6 months, that is usually the time that a credit card company will write it off their books. GAAP Acounting practices force banks to charge-off delinquent debt at around 180 days (it can now go out to 210 days, or even a little longer). Don't believe all that the collections company will tell you. take a look at your credit report to see how the account is being reported. even if it is charged off, that does not mean that you no longer owe that debt, in fact that will continue to show on your report for the next 7 years. it will be in your best interest to get it paid off.

Hi there! My husband recently had difficulty paying his Visa. He was requested to pay the full amount of $3500 in full- from the creditor. He finally paid off the debt. When we recieved our latest credit report...we found out that the Visa had an extra balance of $20.00 owing to it...which my husband was not informed of either by phone or mail. He also was in contact with an Agent of the establishment and was informed that his debt was paid in full. My husband has since put in a complaint with the Ombudsman regarding the situation, as his credit rating was reduced to an R9 and the account was closed by credit grantor. Do we have a chance in clearing this credit rating....given that we were not aware of the $20 b alance...witch has not been paid in over 90 days?

You will have to dispute the entry with the credit bureaus, you can find more information about disputing errors here: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre21.shtm

My parents have had some financial hardships and have not been able to pay on some high balance credit cards for more than 6 mos due to employment and medical reasons. They have 2 Discover cards --one in each of their names that are getting ready to be charged off. They own their home and tried to get an equity/loan to consolidate but were denied because of the late pymt history. I contacted them and was told that since they have assets if this goes to the next step they will get a court judgement against them for the full amt. I want to settle their acct for them with my funds but can't pay the full balances. They told me they will only reduce the debt by 40% but i can only afford a 60% reduction on each card. I thought that this would go to collections first and with my experience have been able to settle my own discover account at a 70% reduction. Are they bluffing about the judgement just because they want me to do reduced pymts? And, if they get a judgement do they no longer have an option to settle the accts for less? Since my dad has the only income should i only do pymt arrangements on his card to protect his rating?

Many collection agencies will use the threat of getting a judgment in order to instill fear in the customers mind in hopes that they will relent and pay what is demanded. Nobody can get an automatic judgment. The case has to go to court first and only after the judge hears the argument from both the sides, will a judgment be passed. I suggest that you continue to help your parents in negotiating a lower settlement. Persistence is key.

I had my wallet stolen in November and immediately called each of credit card companies that I had accounts with to inform them of the situation and for them to issue new account #s and cards. I never received a card from a particular company. Because I always paid my bills online and "went paperless" I never received a paper statement. After 3-4 months of not hearing anything and being able to contact anyone or access my internet account. I finally managed to speak with someone. The lady informed me that my account had been sent to collections and that I needed to deal with them. I immediately contacted the collection agency and, not knowing that I could dispute it with the original creditor, I paid the balance in full. Now I have a charge off on my credit report and I have no idea what to do to remove it! I was never notified that I was about to be sent to collections, I never even received a bill, or a card, or a way to access my account online. Is there anything I can do? Help!

That is very unfortunate. You should have disputed the fact that it was in collections before you paid it. Now that you have already paid the account, the credit bureaus will look at it and assume that it DID go into collections with your knowledge and therefore you made the payment afterwards. Even then, it does not hurt to try to dispute it again. I hope you saved whatever paperwork you had. You can read about how to dispute entries on your credit report by visiting this link: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre21.shtm

I got behind on my credit cards after a life threating illness and loss of my job which turned into social security disability. I kept paying on them with mony from my IRA which is now almost depleted. Now these accounts are being charged off. I only have my social security checks to live----I have no assets and nothing else left. Will these accounts be reported to the IRS where I have to pay taxes on the balances due. My liabilities are much more than any assets I have. How do I prove insolvency? Please advise----thank you

I believe you are asking whether cancelled debt greater than $600 is taxable -- it is. I urge you to contact your county bar association and learn if there is a local legal aid organization for people with low income. It's good for you to consider the tax implications of a default. You may be able to control the timing of the defaults so they land in different years. However, that's really putting the cart before the horse. See an attorney who can review your entire financial situation. You may have other options for dealing with your debt such as bankruptcy.

i have a R9 revolving account on my credit report for more than 6 years and somehow a third or fourth party collection company just recently started calling me about that. first of all how long would a R9 account stays on the credit profile and secondly is it possible for the collection agency to get a judgment against me or take me to court over $2000 and should i even consider paying off that debt since it is that old ?

Two separate issues here. First, a derogatory item on your credit report must be removed after 7 years. Usually, the clock starts at the time of the last payment. The second issue is implied in your question, and that is the statute of limitations on collecting a debt. See the bills.com Collection Laws and Statute of Limitations for the statute of limitations rules in your state. Keep in mind that it is within the creditor's right to try to collect on a debt that has passed the statute of limitations in your state. However, if the creditor goes to court and tries to get a judgment and the defendant raises a statute of limitations defense, the court will dismiss the case.

hi I have an r9 for my master card, it will be cleared at december 2012, if I don't pay it, the creditor can send me to a 3rd party? and it will take 6 years more to cleared this 3rd party??? I am confused, I don't know if I should pay or not or wait for 3 years it will automatically clear on equifax? thanks

In the North American Standard Account Ratings, an "R9" account means either bad debt, placed for collection, or moved without giving a new address. An R0 is a new account, and an R1 account is current. The higher an R code, the more severe the delinquency with R9 being the worst. As I mentioned in my other replies above, derogatory comments must be removed seven years after the last account activity, which is usually the date of last payment. If the original creditor sells your account to a third-party collection agent the clock is not restarted. However, unscrupulous third party collection agents will oftentimes "re-age" an account to reset the seven-year clock. This is illegal, but they take this risk in an attempt to gain leverage on the debtor. Keep in mind that just because the debt is aged-out of credit reports the creditor still has the right to collect the debt and may have the right to file a lawsuit against you to collect the debt. See Advice on Settling a Five Year Old Debt for more details.

Hi there, I just found out from Wells Fargo that are giving me a break on a loan,, and offered me a payout of a cetain amount. She also said my credit score will be a R9 .. I just looked up what R9 means.. My question is why should I even bother paying anything to Wells.. my credit is screwed and can t get much worse can it?

Life can get more inconvenient. Just because a debt falls off your credit report doesn't mean the creditor lost the right to collect the debt. See Advice on Settling a Five Year Old Debt for more details on the relationship (or lack thereof) between a statute of limitations on lawsuits relating to debt, and your credit report. My advice is to negotiate with Wells Fargo to see if the company will report something other than R9 if you settle the debt with a lump-sum payment.

Thanks for the reply.. so what if they say no deal we are listing it as a R9,,they said they want it paid off in 3 months,, I ask what if it takes me 5 months.Can't get much worse then it is right now can it?

I have always found it bad luck to say, "It cannot get worse than this," because karma always comes around and bites me in the wallet. Seriously, if you are delinquent in paying an account, the creditor has the right to file a lawsuit for relief. For the two reasons I mentioned, I am hesitant to agree that nothing is worse than an R9 on your credit report.

My son has two credit cards and a revolving credit line with HSBC that since they raised his interest rate to 25% at this time there is no way he can pay them off or even pay them down. He contacted all three and they are willing to settle for half saving him about $4000 but they will each hit him with the R9. My question is if I help him out and he takes this settlement can they or a third party come back after him years down the road to try and collect the rest? Also since one of these financed a motorcycle that they unsuccessfully attempted to repo will a R9 be any worse? (The bike was wrecked)

Get the settlement agreement in writing. It is common for creditors to settle unsecured debt for 50 cents on the dollar in a lump-sum payment. If the agreement is in writing there would be no legal basis for the creditor to try to collect more from your son later. I recommend you take the agreement to a lawyer in your province and ask him or her to review it and for an opinion if resolving the debt is worth the R9 in these circumstances.

I have a charge off with dollar amount and right beside it it has written off with 0 balance. I was contacted bt collection agency. My credit report does not show that this was sold or transfered. what should I do?

First, sometimes credit reports do not show the most current information regarding accounts. So it is possible that this account may show up in the future. Second, credit reports are notoriously inaccurate. Keep in mind that a credit report is not a legal record, and whether an account appears in your credit report is of no significance legally. In this situation it is a good idea for consumers to validate the debt. Go to the Bills.com debt self-help center and see the debt validation sample letter.

Hi, A couple years ago I had an MBNA credit card with about $1000 outstanding. I forgot about it and was recently informed and immediately paid it off. I was given an R9 write off and now have severe difficulties in getting approved for any type of credit card (including Secured cards) or loans (planning on purchasing a condo). Is there anything I can do to improve my credit fast?

If you are in Canada, see "Understanding Your Credit Report and Credit Score" for information on disputing an erroneous credit report at TransUnion and Equifax, the two big credit bureaus in Canada. If you are in the US, see "Advice on how to clear up and improve your credit score."

Hello, I am at the end of my contract with my car loan. my last payment of around 850 was due June 13, 2009. I of course was not able to make one payment with this amount. I missed a few payments this summer and currently my payoff is 653. I have a pending payment of 250 for the 18th of this month. The rep has stated to me that they will be charging off my account this month even though I have the pending payment. if this payment is made is it possible for them to charge off the account as a R9 even though i am making payments? How long does a charge off process take? Thank you for your reply

The answers to your first question are in your loan contract. If you are behind on your payments, the creditor has the right to consider you in default. If you have been in constant communication with your creditor and making steady payment, then the chances of the creditor charging-off your account would be slim. "Charge-off" is an accounting term that means the creditor, under generally accepted accounting principles, can no longer consider your account current. A creditor may sell a charged-off account to a collection agent, or transfer the account to an internal group that deals with delinquent accounts. Get on the phone to the creditor immediately and make your account current.