Understanding Credit Ratings

Understanding Credit Ratings

In addition to using credit (FICO) scores, most countries (including the U.S. and Canada) use a scale of 0-9 to rate your personal credit. On this scale, each number is preceded by one of two letters: "I" signifies installment credit (like home or auto financing), and "R" stands for revolving credit (such as a credit card).

Each creditor will issue its own rating for individuals. For example, you may have an R1 rating with Visa (the highest level of credit rating), but you might simultaneously have an R5 from MasterCard if you've neglected to pay your MasterCard bill for many months. Here is how the scale breaks down:

Rating	Description
R0 or I0	You are new to the credit world, and you have an insufficient credit history for making an accurate judgment of your future risk.
R1 or I1	You pay your credit back in 1 month.
R2 or I2	You pay your credit back in 2 months.
R3 or I3	You pay your credit back in 3 months.
R4 or I4	You pay your credit back in 4 months.
R5 or I5	You have not repaid in four months, but you are not a "9" yet.
R7 or I7	Your debt payments are made under consolidation.
R8 or I8	Debt was cleared by selling the item (repossession).
R9 or I9	You officially have bad debt (default), which usually means it is uncollectible.