When the creditors and lenders send the information to the credit reporting agencies, each account comes with two identifiers, a number, and a letter. Here’s what they are and what they mean.
Letters Stand for the Type of Account
- O- Open: A line of credit will show up as an open status account on your credit report.
- R- Revolving
- I- Installment: The individual pays back the loan in a fixed amount until the loan is paid back in full
- M- Mortgage
Numbers Represent A Rating
- 0- Account too new
- 1- Paid within 30 days OR paid as agreed
- 2: Late payment, 31-59 days late
- 3- Late payment, 60-89 days late
- 4- Late payments, 90-119 days late
- 5- Late payments, more than 120 days late
- 7: The account is currently under consolidation or a consumer proposal
- Consolidation: When the applicant merges multiple debt streams into a single loan with a fixed monthly payment.
- Consumer proposal: A consumer proposal is a formal agreement between a consumer and their creditors aimed at settling debts without resorting to bankruptcy. The applicant renegotiates their debt obligations, committing to repay a portion of the total amount based on their affordability, typically within a timeframe of up to five years.
- 8- Repossession
- 9- Bad debt, sent to collections or in bankruptcy
Follow this link for a deep dive into the R-code system!