R7, R9 or I9 on Your Credit Report? What a Car Lender Sees

A letter for the type of account, a number for how it is paid. Equifax Canada’s credit report guide lists the letters this way:

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

Put together, an R7 is a revolving account, like a credit card, paid under an arrangement. An I9 is an installment account, like a car loan, that went to bad debt or collection. These are the ratings a car lender asks about most:

The glossary has the same codes in short form, and how a consumer proposal or a bankruptcy shows: R7, R9 and I9 credit ratings. For how a lender reads a proposal, see car loans during or after a consumer proposal.

It can show in more than one place, and it comes off the report. The Financial Consumer Agency of Canada (FCAC) explains the plan: “A debt management plan is an informal agreement between you and your creditors.” “A credit counsellor sets up a debt management plan on your behalf.” On how long it stays, FCAC says: “Credit bureaus remove this information from your credit report 2 years after you finish paying off your debts.”

Equifax Canada’s guide says the part of the report that lists bankruptcies “may contain non-bankruptcy information including: Orderly payment of debt or Credit Counselling.” So a plan can show outside the individual accounts.

How the accounts inside a plan show depends on how each creditor reports them, and two non-profit sources do not describe it the same way. A national association of credit counselling agencies says “there will be a note in your credit report that says you’re enrolled in a debt management plan”. A credit counselling agency says “A debt consolidation program (DCP) is not reported to the credit bureaus by the credit counselling agency. However, each individual account included in the DCP might be reported to the credit bureaus by the relevant creditor”. In plain words, one says the plan itself shows as a note, and the other says the agency does not report it while each creditor reports its own account. The only sure answer for your plan is your own report.

In Alberta, the Orderly Payment of Debts (OPD) program is run by a non-profit credit counselling agency. It says: “Debts protected under the Orderly Payment of Debts (OPD) program are typically reflected on a client’s credit report as R7, because the account is being paid under the protection of a debt consolidation order.” “The R7 is typically removed after two years following the successful completion of the OPD program.” It also says: “During the repayment period, the creditor may report a debt as R9 at the creditors’ discretion, even though the client is participating in the OPD program.” It gives this reason an OPD account shows on your report: “you are not paying your account as originally agreed”. Our page on Alberta’s OPD program and car financing covers the program itself.

Is my car loan in the plan? A non-profit credit counselling society says “a DMP can only be used for unsecured debts, which are debts that you haven’t put up collateral for.” FCAC lists, among the things a report can show, “registered items, like a lien on a car that lets the lender seize it if you don't pay”. The OPD agency’s list of debts that are not in its program includes “Secured loans such as car loans/leases or home mortgages”. Ask your credit counsellor how your own car loan is treated.

It depends on the lender and on the rest of your file. We cannot promise a result, and every lender decides each file. We review every application and call you back. Here is what public pages say lenders look at.

• FCAC: “Lenders use your credit report and score to decide if they’ll lend you money and at what interest rate.”
• Equifax Canada says a credit score may be only one factor, and that the others “may include information such as your income, your down payment, or the amount of the loan.”

If you are on a plan now, talk to your credit counsellor before you take on a new payment. One non-profit says its counsellor will “make sure you can afford your payments based on a budget they’ll help you create”. A car payment changes that budget.

If you have finished a plan, ask your agency what letter it can give you. The OPD agency says: “However, with a good history of payments in the program, you can get a reference letter to take to new lenders.” Bring it with your other papers.

The I tells you it was an installment loan. Equifax Canada says: “An example of an installment loan would be a vehicle loan.” The entry for 9 reads “9: Bad debt; placed for collection; skip account.” So an I9 can be a past car loan that went to bad debt or collection. The guide gives a repossession its own rating: “8: Repossession (voluntary or involuntary return of merchandise).”

The guide also lists what a collection record carries, including “type of collection [UP CL: unpaid collection or PD CL: paid collection]”. So a collection can show as paid or unpaid.

One bank’s page on why applications are declined lists “History of missed or neglected payments” and says: “This will likely lead to a lower rating on your credit bureau and could be of particular impact if previous creditors were forced to write off a loss.” An R9 or I9 is a record of that kind of history. This is one bank’s view, not a rule that applies to every lender.

For how lenders read these files, see a car loan after a repossession, car loans with collections on your credit and the glossary entry on a deficiency balance.

Get both reports. FCAC says: “You can access your credit report online for free from Canada’s 2 main credit bureaus”: Equifax and TransUnion. It adds: “Review your credit report regularly for errors or fraud. Get it from both Equifax and TransUnion.”

Then read each account in three steps.

• The letter and number. The letter is the type of account. The number is how it is being paid.
• The dates. When the account or plan started, and when it ended or is due to end. Items come off the report on a schedule, so the dates show what will drop off, and when.
• Mistakes. FCAC lists two to look for: “incorrect payment history, like payments a lender marked as late even though you paid on time” and “negative information about accounts that still appear after the maximum amount of time it’s allowed to stay on your credit report”.

On how long negative items stay, FCAC gives this example: “information about late or unpaid credit cards and loans: up to 6 years”. Our pages on how credit scores work in Canada and checking your credit score for free cover the rest.

Bring what shows your pay and where each account stands. Having it ready saves a lender from chasing it.

• Government photo ID.
• Your last two pay stubs, and your latest T4 or Notice of Assessment. If your pay is not the usual kind, see what car lenders verify when you work.
• If you are on a plan: a statement from your credit counsellor that shows when it started and where it stands.
• If you finished one: the completion letter, and the reference letter if your agency gives one.
• For a past loan or collection: the lender’s or collection agency’s letter that shows what is owing, or that it was paid.
• A void cheque and recent bank statements.

The quickest start is the online application. Tell us about the code when you apply. We review every application and call you back. Or call us at (825) 736-4438.