Lending reports

Credit reports, credit scores and credit ratings

Credit rating

Each time you receive credit, the lender will rate your payment on a scale of 1 to 9. A letter may also appear before the number to indicate the type of credit you received. Depending on the type of report you get (hard copy or online copy), your credit report may include your credit score. 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 get out of school, etc.)

R

Revolving credit (credit cards, private 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 the payment due date, but no more than one overdue payment

2

Paid more than 30 days from the payment due date, but no more than two past due payments

3

Paid more than 60 days from the payment due date, but no more than three past due payments

4

Paid more than 90 days from the payment due date, but no more than four past due payments

5

The account is at least 120 days (four months) overdue, but is not yet ranked “9”

seven

Make regular payments under a special arrangement to settle your debts, such as a consumer proposal

8

Repossession (voluntary or involuntary return of goods 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 creditworthiness and is based on several different factors:

Your payment history

Your unpaid credit balances

Your overall debt level

The types of credit you have

The number of inquiries made to your credit

· Account statuses expressed as open, closed, inactive, paid, etc.

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

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

Jasmin Brown is Senior Vice President and oversees 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.