A credit report---a record of how you have handled your financial responsibilities---contain numerous codes to denote account activity. The reader of a credit report must understand what the codes stand for to be able to correctly interpret the credit report.
Why Use Codes?
A credit report contains so much information on each account that codes are necessary to keep the length of the credit report reasonable. Common information including per account on a credit report is creditor name, balance, high balance, monthly payment, payment history and type of account.
The R Code
Accounts showing an "R" code indicate the account is a revolving account. An account with revolving credit has a credit limit. You can make payments to reduce the balance on the account and charge back up to the credit limit. A credit card is an example of a revolving credit account.
The I Code
Accounts showing an "I" code indicate the account is an installment loan. An installment loan begins with a set loan amount. As you pay down the loan, you cannot charge back up. You make payments until the loan is paid off and closed. A mortgage or a car loan is an example of an installment loan.
The Numbers
The number codes are in addition to the letter codes. The number codes run from are one through nine. One, two, three, four and nine are the numbers commonly seen on a credit report. A one indicates the account is paid on time. A two means a payment has been 30 days late. A three shows the account has been more than 60 days late. A four is telling you the account has been more than 90 days late. A nine indicates the account has been sent to collection or charged off.
R3 Code
As you can interpret from the above information, an R3 would mean the account is a revolving credit account that has been 90 days late at some point. This could be currently 90 days late or 90 days late at some point in the account history.
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