Charge Of Vs. R9

BILL'S ANSWER

The term "charge-off" is an accounting term used by creditors, meaning that a creditor has transferred an account from its "accounts receivable" books to its "bad debt" ledger. Credit card issuers are required to do this by the federal Office of the Comptroller of Currency, in an attempt to prevent banks from inflating future earnings statements with old and defaulted accounts. For the consumer, the only real consequence of an account charging off is the account will report as a negative item on the consumers' credit reports. As I mentioned previously, charge-off accounts are required to be removed from your credit report seven years after the date of charge-off, so these old accounts will not damage your credit rating indefinitely. (More on this later.)

The best way to determine the charge-off date of an old debt is to obtain a copy of your credit report from each of the three major credit reporting agencies — Equifax, Experian, and TransUnion. Your credit reports should list the date that each of the accounts in question were charged off by the original creditor. Even if the accounts have been sold to a third party since the date of charge-off, your credit reports should still reflect the original date of charge-off, as that is the date of first delinquency.

Third party debt collectors are not allowed to legally change the charge-off date or the date of first delinquency for an account that they purchase, so the fact that your accounts have been purchased should make no difference in the length of time these accounts will appear on your credit reports. However, debt purchasers have been known to try to change dates of last payment, charge-off, or the date of first delinquency in an effort to keep old accounts on consumers' credit reports longer than legally allowed.

If you think that a debt purchaser is reporting an inaccurate charge-off date or date of first delinquency, you should first contact the original creditor to determine the date you last made a payment on the account. Since creditors charge-off accounts between 180 and 240 days from the date of first delinquency, you should be able to roughly determine the charge-off date if you know when you last made a payment on the account. If a debt purchaser is reporting a charge-off date or date of first delinquency that is different from that being reported by the original creditor, you may want to dispute the credit report listing with the consumer credit reporting bureaus. The Federal Trade Commission offers a guide to disputing credit report errors.

Once you have determined the actual charge-off date the date of first delinquency, and confirmed that the account information is reporting correctly to each of the three credit bureaus, you should be able to determine when the accounts will fall of your report. The accounts should be removed automatically from your credit report 7.5 years after the date of first delinquency. As mentioned above, it is important that you verify that the information on your credit report is accurate to make sure that these negative accounts are removed from your credit reports in a timely manner.

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.

If the account is indeed inaccurate, you should contest the accuracy of the report directly with the three primary credit bureaus and petition to have it removed.

According to the Fair Credit Reporting Act, all trade lines can be reported on each of the credit bureaus. However, the reporting agencies must update and keep accurate data in their credit files. If there is erroneous information (like a collection account, that you believe is inaccurate), you must notify them (typically through a certified letter) and then wait one reporting cycle (90 days) for the errors to be removed.

I hope this information clears up any confusion you had and helps you Find. Learn. Save.

Best,

Bill

www.bills.com