Credit rating
How can you obtain your credit rating ?
Your credit score is a judgment about your financial health, at a specific point in time. It indicates the risk you represent for lenders, compared with other consumers.
Letters corresponding to the types of credit you have:
- "I" means you have installment credit, such as a car loan, where you borrow money once and repay it in fixed amounts on a regular basis for a specific period of time until the loan is paid back.
- "O" means you have open credit, such as a line of credit, where you borrow money, as needed, up to a certain limit and the total balance is due at the end of each period. This category may also include student loans, for which the money may not be owing until after you are out of school.
- "R" means you have "revolving" credit, where you make regular payments in varying amounts depending on your account balance, and can then borrow more money up to your credit limit. Credit cards are good examples of "revolving" credit.
The most common ratings are "R" ratings. These are known as North American Standard Account Ratings and are the most frequently used. The "R" indicates that the item being described involves revolving credit. If you always pay on time, it will be coded R1. If an amount was written off because you never paid it back, it is coded R9. The R ratings are a coding system that translates "on time," "one month late," "two months late," etc. into two-digit codes.
| R0 | Too new to rate; approved but not used |
| R1 | Pays (or paid) within 30 days of payment due date or not over one payment past due |
| R2 | Pays (or paid) in more than 30 days from payment due date, but not more than 60 days, or no more than two payments past due |
| R3 | Pays (or paid) in more than 60 days from payment due date, but not more than 90 days, or not more than three payments past due |
| R4 | Pays (or paid) in more than 90 days from payment due date, but not more than 120 days, or not more than four payments past due |
| R5 | Account is at least 120 days overdue, but not yet rated “9” |
| R6 | This rating does not exist. |
| R7 | Making regular payments through a special arrangement to settle your debts |
| R8 | Repossession (voluntary or involuntary return of merchandise) |
| R9 | Bad debt; placed for collection; moved without giving a new address or bankruptcy |
Other rating indicators that might be found on a report are "I" for installment credit or "O" for open credit line.
