Credit Reports, Credit Ratings and Credit Scores

Credit Rating

Each time you receive credit, the lender will rate your payment on a scale from 1 – 9. A letter may also appear before the number to indicate the type of credit obtained. Depending on the type of report you get (hard copy or online copy), your credit report may include your credit rating. The credit rating scale is below:

I	Installment credit (car loan, bank loan, etc.)
O	Open credit (line of credit, student loans where nothing is payable until you are out of school, etc.)
R	Revolving credit (credit cards, store cards, etc.) this is the most common type of credit.
0	Too new to rate; approved but not used
1	Paid within 30 days of payment due date, but not over one payment past due
2	Paid in more than 30 days from payment due date, but not more than two payments past due
3	Paid in more than 60 days from payment due date, but not more than three payments past due
4	Paid in more than 90 days from payment due date, but not more than four payments past due
5	Account is at least 120 days (four months) overdue, but is not yet rated “9”
7	Making regular payments through a special arrangement to settle your debts, such as a Consumer Proposal
8	Repossession (voluntary or involuntary return of merchandise such as a vehicle)
9	Bad debt; placed for collection; bankruptcy

*Note that there is no number 6 because the rating does not exist.

Credit Score

Your credit score really tells the story of your credit worthiness and is based on several different factors:

· Your payment history

· Your outstanding credit balances

· Your overall debt level

· The types of credit you have

· The number of inquiries made to your credit

· The account statuses expressed as open, closed, inactive, paid off, etc.

If your credit score is lower than you would like it to be, there are things that you can do to rebuild your credit and work to improve your credit score.

If you are having trouble making ends meet each month, finding the right debt solution can help. Visit the BDO Debt Solutions website for more information about bankruptcy, or call 1 855 BDO DEBT to book a free, no obligation consultation.

Jasmin Brown is a Senior Vice President overseeing the insolvency practice in Saskatchewan. She is committed to providing creative and practical debt solutions with empathy, understanding and professionalism to help people overcome their financial difficulties.

by Jasmin Brown

Credit Reports, Credit Ratings and Credit Scores

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