When shopping for a car I was told that I have an R9 from old credit card. The card was canceled over a $25 late fee from 1.5 years ago (which is now $125 from interest). I spoke with the credit card company several times back in 2006 and was told that the charge would be pulled off my bill. I have been going in circles between the credit company and the collection agency today to try and dispute the charges. My credit has taken a large dip because of the R9. Would it make any difference (to my credit score) by just paying the collection company? Or would the R9 still be there?
If you pay the R9 account, the record of the delinquency will still remain on your credit report!
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 largest 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.
Three major credit bureaus offer credit reports. Contact them directly if there is something that you want added or removed:
Since you are asking about credit updates, you might also be interested in how your credit score is calculated. Your credit rating is calculated based on several variables, including: your payment history (do you have any late payments, charge-offs, etc.), the amount and type of debt that you owe, if you have maxed out any of your trade lines, and then several other secondary factors like the length of your credit history and how many recent inquiries have been made to look at your credit history. Paying off delinquent or maxed out trade-lines will almost always help your credit score.
There are five key factors that go into calculating your credit score, with certain items carrying more weight than others. These factors are as follows:
While you cannot realistically calculate your own credit score, you can review your credit report for on the five factors I named above to get an idea of whether the accounts listed on your credit report are hurting or helping your credit score. You can then take action to improve any potential problems, such as paying down your balances or paying off collection items.
Also, factors such as age, sex, income, and length of employment, have no direct affect on your credit score, and are not considered when the bureaus calculate your score. Keep in mind that for most lenders, your credit score is only one aspect, albeit an important one, of your overall “credit worthiness,” meaning the creditor’s view of your ability to repay a loan. Your income, for example, is not considered in the calculation of your FICO score, but most lenders will ask you what you earn to analyze your ability to repay the loan. Even if you have an 800 FICO score, if your income is only $10,000/year, a lender will probably not loan you a large sum of money, because despite your past credit habits as measured by your FICO score, the lender can see that you probably cannot afford to repay the loan.
If you would like to learn more about credit reports, credit scoring, and what it means to you, I encourage you to explore the wealth of material offered by the Bills.com Credit Information page.
I hope this information helps you Find. Learn & Save.