Thursday, 30 August 2012

Credit Rating

Credit Rating
Some credit-reporting agencies report the lenders' rating of each of your credit history items on a scale of 1 to 9. A rating of "1" means you pay your bills within 30 days of the due date. A rating of "9" means that you never pay your bills at all or that you have made a consumer debt repayment proposal to the lender. A letter will also appear in front of the number: for example, I2, O2, R2. The letter stands for the type of the credit you are using.

    "I" means you were given credit on an installment basis, such as for a car loan, where you borrow money once and repay it in fixed amounts, on a regular basis, for a specific period of time until the loan is paid off.
    "O" means you have open credit such as a line of credit, where you borrow money, as needed, up to a certain limit and the total balance is due at the end of each period. This category may also include student loans, for which the money may not be owing until you are out of school.
    "R" means you have "revolving" credit, where you make regular payments in varying amounts depending on the balance of your account, and can then borrow more money up to your credit limit. Credit cards are a good example of "revolving" credit.
The most common ratings are "R" ratings. These are known as North American Standard Account Ratings and are the most frequently used. The "R" indicates that the item being described involves revolving credit. If you always pay on time, it will be coded an R1. If an amount was written off because you never paid it back, it is coded R9. The R ratings are a coding system that translates "on time", "one month late", "two months late", etc., into two-digit codes. purposes you were minded credit on an instalment ground, much as representing a automobile accommodation, where you refer to specie at one time and answer it in attached quantities, on a usual base, representing a circumstantial time of clock until the accommodation is paying out. "O" designs you get plain credit much as a limit of credit, where you refer to almighty dollar, as requisite, up to a positive contour and the sum equilibrate is anticipated at the head of apiece amplitude. This family ballplayer besides consist of pupil credits, representing which the bill hawthorn not be owe until you are away of schooltime. "R" have in mind you get "revolving" credit, where you create usual valuations in varied sums reckoning on the equalizer of your story, and buoy so appropriate also bankroll up to your credit borderline. Credit cartes are a great exemplification of "revolving" credit. The near characteristic classifyings are "R" adjudjings. These are declared as N English Stock Balance Valuations and are the near oft hand-me-down. The "R" points out that the article beingness characterized cover rotating credit. Whether you always pament on clock, it liking be coded an R1. Whether an dimension was backhand elsewhere due to you never paying it backbone, it is coded R9. The R classifyings are a writing course that interprets "on time", "single period late", "cardinal months late", etc., into cardinal-dactyl codes.

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