What Is an R9 on Your Credit File?

At any given time, only about 2 percent of Americans know their exact credit score, according to the Frontline. Even less know about the codes used by some lenders on credit reports. "R9" is one of the most important codes you should watch for because it is potentially very damaging; however, you might be able to get it off of your record.

Identification

An R9 on your credit file means you have a revolving loan, most likely a credit card account, in very poor standing or sold to a collections agency. Most lenders send an account to collections after 180 days of nonpayment. An R9 is the worst status you can have on any account, as it shows a refusal or inability to pay the debt.

Effects

The Fair Isaac Corporation (FICO), the company that invented the scoring formula accepted by the majority of lenders, keeps its equation secret so that nobody knows the precise effects of a collections account on a credit score. However, collections accounts insinuate a flagrant misuse of debt, so expect a huge drop in your score. Similar public judgments, such as foreclosure, shave off up to 160 points of your score, reports CNNMoney.com.

Disputing an R9

You should review your credit report several times a year to check for errors -- 25 percent of credit reports contain a serious mistake, like an erroneous collections account, according to the U.S. Public Interest Research Group (PIRG). The major bureaus have standard forms on their websites to dispute information, which they must investigate within 30 days of your claim.

Tips

Contrary to popular belief, paying off a collections account does not improve your credit score, according to MSN Money. You may, however, feel a moral obligation to pay the debt and lenders may require you settle any old debts before they accept an application for credit. Also, check your state's law on collection of old debts. Debt collectors can only pursue a debt for so long. If you want to pay off the debt to remove the collections account on your report, deal with the original creditor because collections agencies cannot remove it under any circumstances.