R7, R9 and I9 Credit Ratings

How the letter and the number work

Each account on a Canadian credit report carries a rating made of a letter and a number. Equifax Canada's credit report guide lists the letters:

• “R: Revolving or option (open-end account)”
• “I: Installment (fixed number of payments)”

Equifax Canada's article on credit mix gives an example of each: “An example of an installment loan would be a vehicle loan.” and “An example of revolving debt would be credit cards or lines of credit.” The credit report guide also rates how the account is paid with a number. The ones people ask about:

• “1: Pays (or paid) within 30 days of payment due date or not over one payment past due.”
• “7: Making regular payments under a consolidation order or similar arrangement.”
• “8: Repossession (voluntary or involuntary return of merchandise).”
• “9: Bad debt; placed for collection; skip account.”

Put together: R7 is a revolving account rated 7. I9 is an installment account, such as a car loan, rated 9.

R7: payments under a formal arrangement

A licensed insolvency trustee's page explains how a consumer proposal shows: “In your individual credit accounts, each creditor included in your proposal will report the debt as ‘included in a proposal’ with an R7 credit rating.” It adds: “This rating applies to the individual trade accounts on your credit report.” The same page says the proposal itself is recorded in a second place: “A note will appear in the legal or public records section of your credit report noting the type of proceeding (in this case, a consumer proposal), the date you filed and, later, your completion date.”

The Financial Consumer Agency of Canada (FCAC) says “Equifax and TransUnion remove a consumer proposal from your credit report:”

• “3 years after you’ve paid off all the debts included in the proposal, or”
• “6 years after you sign the proposal (whichever comes first)”

Your licensed insolvency trustee can confirm the dates for your file. For how lenders read a proposal, see car loans during or after a consumer proposal.

R9 and I9: bad debt, collection or skip

In Equifax Canada's guide, the entry for 9 reads “9: Bad debt; placed for collection; skip account.” With an R it is a revolving account; with an I, an installment loan. A licensed insolvency trustee's page says that “bankruptcy receives an R9 rating”.

FCAC lists “debts sent to collection agencies” among the things a credit report may include. On how long negative items stay, FCAC gives this example: “information about late or unpaid credit cards and loans: up to 6 years”. It also says “Usually, both Equifax and TransUnion remove a bankruptcy from your credit report 6 years after you're discharged.” For how lenders read a collection on your report, see car loans with collections on your credit.

And the 8: a repossession

The same guide has a rating for it: “8: Repossession (voluntary or involuntary return of merchandise).” For how lenders read one, see a car loan after a repossession.

What a lender does with these codes

FCAC: “Lenders use your credit report and score to decide if they’ll lend you money and at what interest rate.” Each lender weighs the codes in its own way, and every lender decides each file. For what a car lender sees on a report with one of these codes, and how a debt management plan shows, read R7, R9 or I9 on your credit report.