Personal Finance

R9 credit rating: What to do?

  • Last Updated:
  • Jun 23rd, 2012 4:09 pm
Tags:
None
Newbie
Feb 12, 2008
68 posts
1 upvote

R9 credit rating: What to do?

I have a joint account with another person who has stopped making payments more than 6 months ago because they weren't receiving a bill (did not change address) and they do not keep on top of things financially.

Now my credit has this R9 blemish that I know will haunt me for years to come. I have decided to pay off this balance in full.

Is there anything else I can do to improve my situation?

I have 10 other trade lines with R1 rating, my credit was stellar before this one account. I only wish I found out sooner.

Will my credit score improve as this R9 continues to age? How much does this impact my actual credit score?
.
.
.
.


Visit my blog @ The Money Monkey | A Blog on the Bananas of Personal Finance
38 replies
Deal Fanatic
User avatar
Nov 12, 2003
7793 posts
36 upvotes
gdc5 wrote:
Nov 2nd, 2009 4:01 pm
I have a joint account with another person who has stopped making payments more than 6 months ago because they weren't receiving a bill (did not change address) and they do not keep on top of things financially.

Now my credit has this R9 blemish that I know will haunt me for years to come. I have decided to pay off this balance in full.

Is there anything else I can do to improve my situation?

I have 10 other trade lines with R1 rating, my credit was stellar before this one account. I only wish I found out sooner.

Will my credit score improve as this R9 continues to age? How much does this impact my actual credit score?
7 years and it's off the credit score

R9 also means that you moved without giving a new address.. so maybe you can dispute it?
Deal Addict
Sep 12, 2004
1303 posts
98 upvotes
Ajax
rdtx2002 wrote:
Nov 2nd, 2009 4:24 pm
7 years and it's off the credit score

R9 also means that you moved without giving a new address.. so maybe you can dispute it?
Giving a new address to who? equifax/transunion?
Newbie
May 6, 2009
43 posts
1 upvote
gdc5 wrote:
Nov 2nd, 2009 4:01 pm
I have a joint account with another person who has stopped making payments more than 6 months ago because they weren't receiving a bill (did not change address) and they do not keep on top of things financially.

Now my credit has this R9 blemish that I know will haunt me for years to come. I have decided to pay off this balance in full.

Is there anything else I can do to improve my situation?

I have 10 other trade lines with R1 rating, my credit was stellar before this one account. I only wish I found out sooner.

Will my credit score improve as this R9 continues to age? How much does this impact my actual credit score?
DON'T PAY IT! It will actually hurt you in the long run. The R9 is based on the date of last activity. I know this from personal experience. You may make the period before it drops off your credit record much longer.

Try to go the dispute route, or if that fails, at least write an explanation so that if it is flagged in your file you at least have your side on the record. Make sure you do this for both Transunion and Equifax.
Deal Addict
Dec 13, 2007
1488 posts
37 upvotes
Toronto
Ottawaguy2626 wrote:
Nov 2nd, 2009 5:35 pm
DON'T PAY IT! It will actually hurt you in the long run. The R9 is based on the date of last activity. I know this from personal experience. You may make the period before it drops off your credit record much longer.

Try to go the dispute route, or if that fails, at least write an explanation so that if it is flagged in your file you at least have your side on the record. Make sure you do this for both Transunion and Equifax.
What an immoral, stupid, and wrong advice. What's there to dispute? OP has join account which means each one is responsible. Pay it up, and make sure it gets updated with credit bureau.

Advising not to pay the account when OP is willing and has means to, is just incomprehensible.
Newbie
May 6, 2009
43 posts
1 upvote
slavka012 wrote:
Nov 2nd, 2009 5:48 pm
What an immoral, stupid, and wrong advice. What's there to dispute? OP has join account which means each one is responsible. Pay it up, and make sure it gets updated with credit bureau.

Advising not to pay the account when OP is willing and has means to, is just incomprehensible.
If the account is R9, it means it's already been sent to to collection agency, and has been written off as uncollectible by the original company. The original company will be getting the money back in the form of a tax deduction. Morality doesn't have much to do with it. The damage has pretty much been done and now it is a waiting game for it to purge off the record.

Paying it wont actually help, and could actually hurt in the long run. Don't quote me tho, I am just going off what happened to me. I had an R9 on my account and finally paid it after 2 years, and the the date of last activity in 2002, and finally was clear in November 2008.

Perhaps the way to go is get it moved into R7 status?

http://www.startingovertoronto.com/faqs.php

Check pargraph 7.

I am by no means an expert on credit, and never claimed to be one. I do recall this thread on RFD as really helpful tho:

http://www.redflagdeals.com/forums/im-p ... ay-392710/

Hellfire actually is an expert, he would probably be the best person to ask.
Deal Addict
Dec 13, 2007
1488 posts
37 upvotes
Toronto
Ottawaguy2626 wrote:
Nov 2nd, 2009 7:07 pm
The original company will be getting the money back in the form of a tax deduction.
You better stick to writing what you actually know. This sentence above is an utter nonsense. You remind me of the Kramer in this episode. He is equally ignorant.

http://www.youtube.com/watch?v=rCZRqH7sRyA

Yes morality has everything to do with it -- you owe money, you pay it up. It's that simple. Oh, and by the way -- you stick to this rule and you'll never have to worry about your credit rating. I can't remember last time I looked at mine.
Deal Addict
Oct 30, 2008
2120 posts
53 upvotes
Toronto
Since I see credit reports on a regular basis, I feel I should throw in my two cents:

R9 means:

(1) The debt has been written off by the original creditor (bad debt)
(2) The debt has been sent to collection
(3) The debt, if it's revolving and still reporting R9, means they can't collect it because they can't find you

Remedies:

(1) If the debt is revolving and active with a collection agency, it will continue to be reported to the bureau. It's not uncommon to see the original creditor reporting on the trade line even though they're no longer involved in the collection of the debt. It will show up on your file as UPCL, meaning unpaid collection

(2) If the debt has been written off by the creditor and not sent to collections or if collections collapsed the file, the R9 will stay on your record for 6 years (with Equifax) from the date of the last report by the creditor. It will be marked as UPCL if you haven't paid it but a few years may have passed from the date of last activity

(3) If you PAY the debt, the collection agency will report the bureau (and this doesn't always happen automatically as most collection agencies are staffed by first-class amateurs), the trade line will change to PDCL (meaning paid collection). At this point it will purge from the record 6 years from when the status was changed to PDCL!!! NOT when the amount was first reported (contrary to popular belief).

If you paid the debt, the R9 remains on your record and will be purged in 6 years from when you paid it. The ramifications remain the same. Paying the amount will not fix your credit score but rather ensure that it will be purged in the future from the record. Whether you choose to pay or not is up to you. If it's not revolving and there has been no activity for a few years, then you may as well just let it purge by itself and keep your money. On the other hand, if it's still revolving and reporting R9, then paying it off now will ensure that 6 years from now it will purge. However, paying it off will not improve your beacon. It will improve your credit in the long run when it purges but not for at least 6 years.

If you have 10 trade lines that are all rated R1 the damage isn't all that bad. The bank or lender will ask about the R9 and as long as you can provide a good reason, I don't see any issues. If anything you can call Equifax and add an explanation on that trade line.
Lior Hershkovitz
Broker at Mortgage Edge, specializes in construction financing and private lending
Construction rates start p+2.5%, 2nd mortgage start 5.99%, private financing start 7% max. 95% LTV
Deal Addict
Feb 5, 2009
2084 posts
184 upvotes
slavka012 wrote:
Nov 2nd, 2009 7:20 pm
You better stick to writing what you actually know. This sentence above is an utter nonsense. You remind me of the Kramer in this episode. He is equally ignorant.

http://www.youtube.com/watch?v=rCZRqH7sRyA

Yes morality has everything to do with it -- you owe money, you pay it up. It's that simple. Oh, and by the way -- you stick to this rule and you'll never have to worry about your credit rating. I can't remember last time I looked at mine.
LMAO, first thing I thought of when I read his post.

They just write it off!
Member
Jul 25, 2009
411 posts
1 upvote
slavka012 wrote:
Nov 2nd, 2009 7:20 pm
You better stick to writing what you actually know. This sentence above is an utter nonsense. You remind me of the Kramer in this episode. He is equally ignorant.

http://www.youtube.com/watch?v=rCZRqH7sRyA

Yes morality has everything to do with it -- you owe money, you pay it up. It's that simple. Oh, and by the way -- you stick to this rule and you'll never have to worry about your credit rating. I can't remember last time I looked at mine.
Leave Kramer out of this. I am extremely disappointed that you found it necessary to bring him up.
Deal Addict
Dec 13, 2007
1488 posts
37 upvotes
Toronto
aidan24 wrote:
Nov 2nd, 2009 9:14 pm
Leave Kramer out of this. I am extremely disappointed that you found it necessary to bring him up.
Hey, don't say that! I love Kramer! In fact, he is a genius! :)
Deal Guru
User avatar
Nov 15, 2004
12581 posts
903 upvotes
Toronto
liorsyncro wrote:
Nov 2nd, 2009 7:28 pm
(3) If you PAY the debt, the collection agency will report the bureau (and this doesn't always happen automatically as most collection agencies are staffed by first-class amateurs), the trade line will change to PDCL (meaning paid collection). At this point it will purge from the record 6 years from when the status was changed to PDCL!!! NOT when the amount was first reported (contrary to popular belief).

If you paid the debt, the R9 remains on your record and will be purged in 6 years from when you paid it. The ramifications remain the same. Paying the amount will not fix your credit score but rather ensure that it will be purged in the future from the record. Whether you choose to pay or not is up to you. If it's not revolving and there has been no activity for a few years, then you may as well just let it purge by itself and keep your money. On the other hand, if it's still revolving and reporting R9, then paying it off now will ensure that 6 years from now it will purge. However, paying it off will not improve your beacon. It will improve your credit in the long run when it purges but not for at least 6 years.
This is true. Despite the fact that paying it is the ethical thing to do, the system will not reward such behaviour. It is in the OP's interest not to pay it and let it drop off his record automatically.

OP, I ended up in a similar situation. I took OSAP the first year of university, and only got something like $700. I realized it was a useless program if you don't know how to milk it and I could do better by myself, so I worked and paid it off. Unfortunately, they somehow managed to tack on $40 on top of what I owed, and didn't contact me to let me know it was still outstanding for three months. As a result, I have a 'three or more payments past due' for 40 bloody dollars. It's not going to drop off until 2011, and there's nothing to be done but wait it out.
Sr. Member
Sep 28, 2008
556 posts
43 upvotes
OP, I too will vouch for the "paying it off does nothing" argument. Quite a while ago, through my own doing, I had a visa bill go to collections. Collections only wanted a portion of what was owing, but I offered to pay all of what was orignially owed, with the the intentions of 1) speeding up the recovery process of my debt rating and 2) feeling better morally. The collections agent told me I was pretty much an idiot for wanting to do that, as the damage had been done and that Visa had moved on it from it, which is why I was dealing with her.

Take it as a learning experience, and if you really want to see that money go to something good, donate it to a worthy cause. Just my 2 cents.
Deal Addict
User avatar
Oct 23, 2006
3248 posts
493 upvotes
Winnipeg
Efx wrote:
Nov 2nd, 2009 4:36 pm
Giving a new address to who? equifax/transunion?
DO YOU NEED TO DO THIS WHEN YOU MOVE?

I thought since you change all your credit cards, the credit agencies automatically update your address
Deal Addict
Oct 30, 2008
2120 posts
53 upvotes
Toronto
If you have a revolving debt that's still reporting R9, such as a student loan, just offer the collection agency to settle it for pennies on the dollar. It's already been written off by the creditor, now they're just trying to salvage whatever they can by holding the borrower by the balls with the R9 on the bureau. Even if they can still go to court, they know that going to court is expensive, takes a long time, and they know that the judge may order them to reduce the balance if the borrower has no ability to pay. The outcome is just too unpredictable.

How much should you offer? I would start with 10 cents of the dollar and negotiate from there. They will have to settle for less, there are no exceptions here. After all, even after you pay off the amount the trade line remains on file for 6 years. There's no need to be confrontational when dealing with the collection agency, just be realistic. Usually the more aware you are of how the system works the less the likelihood some 20k a year bill collector has of ********ting you into paying the full amount.

If you have an R9 and it hasn't been updated in a while, just let it purge automatically. But beware that it may always come back if the debt is transferred to a collection agency or if your creditor sells the debt to firms like Aktiv Kapital, who specialize in buying junk debt.
Lior Hershkovitz
Broker at Mortgage Edge, specializes in construction financing and private lending
Construction rates start p+2.5%, 2nd mortgage start 5.99%, private financing start 7% max. 95% LTV
× < >

Top