Credit reports contain codes that, when deciphered, can provide the reader of the credit report with more information on how he has handled his finances. R codes go from R1 to R9. In addition to R codes, there are also I codes from I1 to I9.
What is a Credit Report?
A credit report is a record of your financial past. Creditors report your payment information, balance, payment history and more about your accounts. Account history remains on a credit report for a minimum of seven years and can have a large impact on your credit rating and your future credit.
What is a Credit Rating?
A credit rating or credit score is a three-digit number between 300 and 850. The higher the number, the better your credit is. A credit score is used by lenders when reviewing your application for new credit. When you handle your accounts well – paying on time and keeping low balances, your credit score will remain high or will rise if you are rebuilding your credit. Paying payments late, having high balances and stopping payments completely all have a damaging effect on your credit score. The better your credit score, the lower your interest. The lower your interest -- the lower your payment will be.
Credit Reporting Codes
Codes are used on credit reports to keep the reports from being too long. Credit reports are often many pages long, and writing out all information would significantly increase the number of pages. Both number and letter codes are used on a credit report to indicate both the type of account and the status of the account. An “I” indicates an installment type loan, “J” indicates a joint account and an “R” indicates a revolving account.
The R7 code indicates the account is a revolving account. A revolving account is an account that has a credit limit that you can pay down and then charge back up. A credit card is a type of revolving account. The number “7” indicates the account has been placed on a payment plan as part of a settlement agreement. An R7 code is a negative entry because it is telling creditors that you were unable to manage the account and the creditor had to work out an agreement with you.
Order Credit Reports
Visit annualcreditreport.com to order a free copy of your credit report. (see Resources) Each account listed will have a code to indicate what type of account and whether the account is in good standing. The best indicator is a 1 attached to a letter code. A 1 indicates the account has never been paid late and is being paid on time.
- Credit Guru: Basics of a Consumer Credit Report
- Credit Engine: Equifax Credit Report Format
- Federal Deposit Insurance Corporation: Credit Reports and Scores
- Report to Congress. "Under Section 318 and 319 of the Fair and Accurate Credit Transaction Act of 2003." Accessed October 8, 2020.
- Consumer Financial Protection Bureau. "Common Errors People Find on Their Credit Report - and How to Get Them Fixed." Accessed October 8, 2020.
Living in Denver, Lynndee Marooney has been writing finance and credit-related articles, guides, manuals and e-books for private companies since 1995. She holds a Bachelor of Arts in journalism and a Bachelor of Science in finance from the University of Maryland. She enjoys counseling clients who are experiencing financial difficulties.