A credit report contains a record of your financial accounts and shows how you have maintained those accounts. A credit report contains codes and digits that have meaning. Without knowing what the codes mean, you may have a difficult time reading the credit report.
Why are There Codes?
A credit report contains a large amount of information. All of your financial accounts that have been reported for the previous seven plus years will appear. For each financial account the name of the creditor, balance, high balance, payment amount, type of account, payment history and more is recorded. By using codes, it reduces the amount of text needed.
I Codes
Any loan that is an installment loan will be marked by an "I." An installment loan is a loan with a fixed payment amount over a fixed number of years such as a mortgage or a car loan.
R Codes
R codes are used to identify revolving credit. Revolving credit is a type of credit where you have a credit limit and can reduce the balance and charge it back up. A credit card is an example of revolving credit.
Number codes
Along with the R or I code on the credit report you will find a 1 to 9. While it is rare to see a 5, 6, 7 or 8, the codes 1, 2, 3, 4 and 9 are commonly seen. A 1 indicates the payments are made on time. A 2 indicates a payment has been 30 days late. A 3 rating indicates the account has had a 60 day late payment and a 4 indicates the account has had a payment later than 90 days. A 9 -- the worst rating, shows the account has been charged off or referred to collections.
R1 Code
By reading the above information, you can gather that an R1 is a revolving account that has been paid on time.
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